As 2016 turned the corner into a new year, macroeconomic uncertainty kept the world – and the global business
community – on tenterhooks. The Mexican health industry cast a wary eye on events north of the border that
were impacting the local exchange rate while also focusing treatment efforts on obesity and diabetes, which
continued to top the country’s major health concerns. Considered as epidemics by the government, steps are
being taken to eradicate these diseases in the country, especially through prevention. However, universal access
to health, a key to promoting prevention in an increasingly aging population that is not accustomed to continuous
medical checkups, remains an illusive ideal in the face of a fractured Mexican health system and the large number
of people who continue to work informally, which complicates their access to a system marked by budget cuts.
In this context, collaboration between the public and private sectors is vital for improving quality of life.
In the private sector, global economic uncertainty, and the election of US President Donald Trump, led large
pharmaceutical companies to begin 2017 with some misgivings about peso volatility versus the two major
currencies: the dollar and the euro, although initial fears faded as stability returned to the domestic currency. In
fact, most continue to report growth and show a commitment to the development of health in Mexico through
investments in areas such as clinical research, an area in which the country aspires to become a referent.
The health sector, which represents around 6 percent of the country’s GDP, continues to be a strategic industry
for Mexico, a country blessed by an ideal geographical location, neighbor to the US and gateway to Latin
America for many companies, and a diverse population. Mexico Health Review 2017 offers key insight into the
challenges and the opportunities the industry continues to face, providing top-shelf interviews, analyses, insights
and infographics. Mexico Health Review 2017 is essential to understanding the state of the health industry in
Mexico today and for the path ahead.
2017
A L L R I G H TS R E S E RV E D
© Mexico Business Publications S.A. de C.V., 2017. This annual publication contains material protected under International, United States and Mexican
Laws and international Treaties. Any unauthorized reprint or use of this material is prohibited. No part of this book may be reproduced or transmitted
in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without
express written permission from Mexico Business Publication S.A. de C.V. Mexico Health Review is a registered trademark.
The publisher has made all reasonable efforts to provide accurate information, and the information contained in this publication is derived from
sources believed to be true and accurate. However, the information in this publication should not be considered to be complete or definitive, and
may contain inaccuracies or typographical errors. The publisher accepts no responsibility regarding the accuracy of information and use of such
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I S B N : 978 - 0 - 9 9 93 1 0 8 - 0 - 9
TABLE OF CONTENTS
CLINICAL RESEARCH & TESTING7 DOING BUSINESS IN MEXICO14
BIG DATA & HEALTH APPS6 ATTRACTING & RETAINING TALENT13
MEDICAL DEVICES5 INSURANCE12
GENERICS & BIOSIMILARS4
BIG PHARMA3
HEALTH CONCERNS11
YEAR IN REVIEW1
LOGISTICS & SUPPLY CHAIN10
HEALTHCARE SYSTEMS2 NUTRITION & WELLNESS9
BIOELECTRONICS & BIOTECH8
5
As public institutions face shrinking budgets, they are struggling to cover a
larger number of patients who are increasingly suffering from preventable
disorders such as type 2 diabetes (T2D), obesity and conditions such as cardiac
insufficiency that ensue. These have also worsened due to poor lifestyle habits
such as a lack of exercise, smoking and alcohol consumption. External factors
are also worrying. The Mexican peso has dropped against many currencies,
pushing up the cost of importing goods and parts. This has hit the bottom line
of companies in all sectors of the industry. Many are so far reluctant to pass on
those added expenses to consumers, but for how long? An uncertain security
environment in Mexico and the persistent problem of access to healthcare for
many add to the question marks surrounding the sector.
This chapter will provide an overall review of the healthcare industry, featuring
insights from the most prominent and important figures in the sector. It includes
interviews from pertinent health and industry associations, government
institutions and health-related agencies while discussing the state of the Mexican
health system, the changes in regulation that occurred over the year, the progress
made and the challenges to come.
YEAR IN REVIEW
1
7
CHAPTER 1: YEAR IN REVIEW
8 ANALYSIS : Despite Headwinds, Optimism Reigns
12 VIEW FROM THE TOP: José Narro, Ministry of Health
14 VIEW FROM THE TOP: Julio Sánchez y Tépoz, COFEPRIS
16 VIEW FROM THE TOP: Rafael Gual, CANIFARMA
18 VIEW FROM THE TOP: Cristóbal Thompson, AMIIF
20 VIEW FROM THE TOP: Edgar Romero, AMID
22 VIEW FROM THE TOP: José Campillo, FUNSALUD
24 INSIGHT: Patricia Uribe, CENSIDA
Carlos Magis, CENSIDA
26 INFOGRAPHIC: COFEPRIS Breaks Down Barriers
27 VIEW FROM THE TOP: Ana Güezmes, UN Women
28 VIEW FROM THE TOP: Pressia Arifin-Cabo, UNICEF
30 ANALYSIS: Air Pollution World’s Fourth-Biggest Killer
8
DESPITE HEADWINDS, OPTIMISM REIGNS
epidemics, the first noncontagious diseases to
be considered as such. Although many private
and public-sector initiatives are afoot to combat
the diseases and related complications, to make
true progress personal habits need change, says
José Narro, the Minister of Health of Mexico. “The population
is not fully conscious about the dimension of the problem.
Secondly, although there has been a deceleration of the death
rate, there is no decline. The number of deaths due to diabetes
multiplied by about seven times between 1980 and 2015, from
around 14,600 in 1980 to 98,500 in 2015. In the 21st century
so far, there have been 1.1 million Mexican deaths directly due
to diabetes. This is a grave problem. We must ensure that
the measures that appear to be effective are maintained. We
also must act to protect young children and teenagers. For
this reason, in May 2017 we began the Salud en tu Escuela
(Health in your School) program, which will send doctors to
over 1,700 primary and middle schools to talk about key health
topics,” Narro says.
The government’s measures include raising awareness
through various publicity campaigns but it remains hampered
by access issues with the public health system and a shrinking
government budget. With less money to spend, government
institutions have placed a priority on generics, pressuring Big
Pharma companies. On the other side of the ledger, both the
public and private spheres have penciled in clinical research
as a strategic segment that could provide a windfall to
companies, government institutions and ultimately, patients.
A FRACTURED SYSTEM
The theme of access to health remained a significant topic
in 2016/2017. The many Mexicans working in the informal
sector are denied access to the main public healthcare
institutions and are obliged to pay out-of-pocket for
Global economic and geopolitical uncertainty marked the
latter part of 2016 and the first half of 2017 and sparked
concern for many companies worried that currency
fluctuations would negatively impact their bottom line. The
peso yo-yoed in line with US polling predictions in the run-up
to the November 2016 US elections and further depreciated
against the US dollar post-elections as newly elected President
Donald Trump maintained his nationalistic rhetoric, much of it
directed against Mexico. The dollar appreciated against many
other currencies, including the euro, against which the peso
faltered, negatively impacting many European-based health
companies. As 2017 rolled out, the Mexican peso stabilized
and saw its best quarter in decades. The health sector plans
for the long-term and most companies reported growth and
plans to continue investing in Mexico, despite their initial fears.
“Teva has drawn up a list of countries with growth markets
and Mexico is among those,” says Guillermo Ibarra, Director
General of Teva Mexico, a unit of the world’s largest generics
company, which produces 120 billion tablets and capsules
per year. “One of my jobs has been to internally sell Mexico to
our global headquarters. It is a country that has industrialized
greatly and is not reliant on commodities; it has steady
economic growth of around 2-2.5 percent per year, which
in the long term makes Global want to continue investing
in the country. We have invested many millions of dollars in
improving, updating and raising the bar for our plants.”
Aside from the economic headwinds that buffeted the
sector before tailing off, two diseases loomed over the health
industry: obesity and diabetes, both of which were declared
ANALYSIS
Despite geopolitical and economic pressures both at home and
abroad, Mexico’s health industry is pulling together to improve
access, raise awareness of the need for prevention and taking
steps to position itself as global hub for clinical research
—US Dollar —Euro
Source: Ministry of Economy
MEXICAN PESO EXCHANGE RATES AT THE BEGINNING OF THE MONTH 3Q16 TO 4Q17
Peso to Dollar Peso to Euro
EXCHANGE RATES ON THE FIRST WORKING DAY OF THE MONTH
18.3018.85 18.85
19.32 19.13
15
20
25
JuneMayAprilMarchFebJanDecNov OctSeptAugJuly
2016 2017
20.74 20.73 20.77
19.90
18.73 18.77 18.59
20.8720.49
19.95
20.96
22.4321.8922.04
21.0921.71
21.04 21.0220.36
9
35 percent. Like glaucoma, macular degeneration must be
detected early because the impact is irreversible. Diabetic
retinopathy is common due to the big diabetes problem
in Mexico and occurs in both T1D and T2D. It also requires
early diagnosis to stop the progression of problems in the
retina,” he says. However, the theme of access remains. To
carry out checkups and catch conditions and diseases early,
the population must have access to healthcare services.
Amid belt-tightening, public-sector institutions are
stretching budgets to cover more people. The Seguro
Popular, for instance, has started eliminating duplicate
registrations with other institutions. “We have cleaned
up our database and no longer have 9 million duplicate
registrations. We will continue to work on this in 2017 and we
expect to reflect this in a higher quality service for patients
because there will be more resources per policyholder.
Seguro Popular has been sharing information with other
health systems since 2016, a year in which we lowered the
number of policyholders by 3 million,” says Gabriel O’Shea,
National Commissioner for Social Protection in Health of
Seguro Popular.
PRIVATE SECTOR UNDER PRESSURE
Companies are also feeling the pressure to make their
products available to a larger proportion of the population.
Big Pharma companies are often the only producers of a
certain treatment and therefore have a responsibility to
ensure it is as widespread as possible. In recent years, as the
government tender process has consolidated and amplified,
budget requirements often mean generics are favored over
patented brands and some brands have even been liberated in
Mexico so that generics companies can create less expensive
versions of the products. This has pushed some Big Pharma
companies out, and some have created their own generics
lines to remain competitive. “In 2016, the Mexican health
industry saw one of its toughest years, achieving single-digit
growth in terms of value due to the introduction of new
products and price increases,” says Raúl Camarena, General
Manager of Aspen Labs Mexico. Despite a difficult year, the
Mexican pharmaceutical market remains the second largest in
treatment or use Seguro Popular. This encourages the
population to delay seeking diagnosis and treatment, as
many prefer to live in blissful ignorance of a condition than
to have it formally diagnosed. Not beginning treatment
causes diseases to worsen and the effects cost dearly.
“In most countries, pharmaceuticals represent only 10
percent of the total cost of diabetes. If people can invest
that first 10 percent or even a little more to get access to
better products, a big part of the other 90 percent of costs
can hopefully be avoided. In Mexico, this is critical, because
the system is now treating the complications of people that
began suffering from diabetes 15 years ago. Since then, the
diabetic population has more than doubled,” says Yiannis
Mallis, Vice President and General Manager of Novo Nordisk
Mexico, the market leader for diabetes pharmaceuticals.
Faced with shrinking budgets, public institutions are
struggling to cover a larger number of patients who are
increasingly suffering from preventable illnesses such as
type 2 diabetes (T2D), obesity and the ensuing conditions
from these diseases such as cardiac insufficiency. These
are worsened by poor lifestyle habits such as a lack of
exercise, smoking and alcohol consumption. Dealing with
the complications is keeping the hospital sector busy.
While public institutions are bursting, private hospitals
have capacity to spare. The two are working on a more
efficient way of collaborating to alleviate the public sector
burden and improve access. Several PPPs were announced
during the year for the construction of hospitals, most of
which will be operated by ISSSTE. However, many argue
that increasing the number of hospitals is not the key to
improving the health of Mexicans. “Health is a process, not
a state. Health ranges from the complete state of physical
and mental wellbeing as defined by the WHO, to a second
before death, when health is basically lost. In between there
are many states, some better than others. If people see
health this way, prevention can be put in place. We want to
promote education so that more people can take control of
their health. We must begin to build processes for healthy
aging,” says Narro.
This is vital with any disease but it is especially important
for diabetes and cancer given their impact, related
ailments and high number of sufferers, which big and small
companies have recognized. Janssen, part of giant Johnson
& Johnson, for example, is working on early diagnosis
methods for prostate cancer while young Mexican startup
Higia Technologies is developing early detection methods
for breast cancer. Rogelio Villarreal, Director General of
Centro de Oftalmología Monterrey and Ojos Para México
Foundation, says the problem runs across many afflictions.
“Although the prevalence of glaucoma is 5 percent at
40, at 70 it is 18 percent and above that it rises to 30-
MEXICO'S PHARMACEUTICAL MARKET (US$ billion)
Sources: BMI Research, Seale & Associates
3.3Generics
MEXICO’S PHARMACEUTICAL MARKET
11.2Total value
10
branded generic products available from large pharmacy
chains and retailers. The world’s largest company in this
sector, Perrigo, is confident in the Mexican market. “Our
business in Mexico is extremely important to Perrigo’s global
operations. Not only do we share a very similar business
model with the US branch of Perrigo but we service many
of the same strategic customers that have presence on
both sides of the border. We have identified Mexico as
the country in Latin America with the greatest potential
for growth as the economic and demographic conditions
are very promising for our industry. We believe that each
day there will be more opportunities to develop significant
supply-chain partnerships between our countries due to
NAFTA,” says Ricardo Ganem, Vice President and General
Manager of Perrigo Mexico. “Each retailer is different, with
distinct formats and specific strategies. Our job is to work
with them in developing products and brands that best
fit each of their strategies. Even smaller pharmacies have
varying strategies. Some sell from behind a counter like
traditional pharmacies, whereas others are more like mini-
supermarkets where you could even buy groceries and
other convenience items. This is a model more often seen
in the US but it is a growing trend in Mexico,” he adds.
Medical device manufacturers face some of the same issues
as Big Pharma companies, as some devices have high price
points and suffer if budgets remain too low to invest in
new equipment. In addition, specialized devices are facing
tough competition from more generic, cheaper and older
models. “The prices are also low, so they are not sustainable
in the long term. We can offer those prices for one year, but
not several years running, especially with the depreciation
of the Mexican peso against other currencies. This is not
sustainable and endangers quality,” said Martín Ferrari,
Director General of Dräger Mexico.
One method that can be used to find ways to improve
healthcare is Big Data. Although the collection of Big Data
in healthcare has been slow in the past due to the lack of
digitalization, with the penetration of smartphones and the
increased number of startups it is taking off in 2017 with
giants such as Grupo PLM, Google and even Facebook.
“Many healthcare organizations use incredibly sophisticated
technology in diagnostics and treatment but substantial parts
of their workforce use only rudimentary or no technology.
Less than 20 percent of payments to healthcare providers and
their suppliers are done digitally, for example,” states a 2016
McKinsey article in Harvard Business Review. These gaps are
huge opportunities to digitalize and implement Big Data tools
in Mexico, as with the right push the country could leapfrog.
TESTING … TESTING
The first half of 2017 also saw a push for clinical research as
the authorities stepped in to help make Mexico the clinical
Latin America and among the top 15 worldwide, according to
KPMG. BMI Research reports that the Mexican pharmaceutical
market as a whole was worth US$11.2 billion in 2015, of which
Seale & Associates estimate US$3.3 billion was attributable to
generics. Generics producers are keen to make sure their more
affordable alternatives are available in as many points of sale
as possible. Releasing packets of innovative medicines so that
generics companies can create options and increase access
has been one of the greatest weapons in the government’s
plan to offer increased access. However, price pressures have
begun impacting companies that are unwilling or unable to
go as low as requested. “We hardly sell to the government
because it has adopted an aggressive price-reduction policy.
This policy erodes income at companies like pharmaceuticals,
which need to earn money to continue reinvesting in research.
For companies like us, selling to the government is not
viable. We have decided to only sell particular products to
state hospitals, so 95 percent of our sales are to the private
market,” says Felipe Espinosa, CEO of Mexican pharmaceutical
Laboratorios Collins.
As a result, many companies have begun turning to the
private sector for growth, looking for other streams of
revenue such as manufacturing for private labels, the
ANALYSIS
AVERAGE AGE IN MEXICO
0
5
10
15
20
25
30
20152010200520001995
21 2224
26 27
NUMBER OF ELDERLY ADULTS PER 100 CHILDREN AND YOUTHS
0
5
10
15
20
25
30
35
40
201520102005200019951990
1618.5
21.3
26.4
30.9
38
NUMBER OF ELDERLY ADULTS IN MEXICO (per 100 children and youths)
AVERAGE AGE IN MEXICO (years)
Source: INEGI
11
is a hot topic that requires care. We are a low-margin
industry, so all additional costs immediately impact
our profitability. We need to be prudent about how we
manage additional expenses, which, ideally, we should
not have. The health industry in Mexico is also a complex
and fragmented one that requires different skillsets.
I truly believe that Mexico is one of the most complex
healthcare markets,” says José Alberto Peña, Director
General of Grupo Marzam, one of the country’s big four
wholesalers/distributors of the health sector.
Then there is the black market and the issue of
counterfeit medicine. To render faking medicine less
appealing, pharmaceuticals are enhancing security at
their warehousing facilities, as well as working to provide
security features on their packaging. Holograms, braille
and QR codes are just some of the methods used to prove
authenticity. The medical devices sector suffers less from
counterfeiting but more from the illegal importation and
sale of devices that are not stored in adequate conditions
to ensure patient safety. Herbal products have also faced
shake-ups recently, with many being removed from sale
after COFEPRIS inspection. Ensuring the authenticity of
claims on packaging has been a main goal for this sector.
However, IMSS has been looking into including herbal
medicine, a Mexican tradition, as the public institution
is in desperate need of safe, cost-effective alternatives.
LOOKING FORWARD
Although challenges remain in the Mexican healthcare
system, there are also opportunities for companies to
bridge gaps, the most notable of which is set to remain
access to healthcare as both sectors seek to increase
treatment options for a growing number of people, at a
price that does not break the bank. Companies will need to
balance this with providing innovative solutions, as well as
ensuring they can be amplified to suit the needs of Mexico’s
121 million inhabitants.
research hub many have been predicting for years. “In
January 2017, we signed an agreement to promote clinical
research that simplifies processes and integrates them. To
meet all requirements and obtain all permits used to take
365 days but we are reducing this to 45 days. Our goal is
to triple the investment in clinical research in Mexico and
we hope to see US$600 million over the next two years,
up from under US$200 million. An agreement has been
reached with IMSS and ISSSTE will soon join the program.
We are working on another agreement with the national
health institutions and with UNAM. This will no doubt
happen by the end of 2017,” says Julio Sánchez y Tépoz,
Commissioner of COFEPRIS. Medicines that are released
by companies cannot be sold immediately in the Mexican
market, as regulation stipulates that they must undergo
testing by COFEPRIS, in addition to the clinical trials they
underwent either in Mexico or elsewhere, to first ensure
their safety and efficiency. The backlog COFEPRIS saw in
this area led the regulatory agency to create the authorized
third-party figure which can perform testing on its behalf.
“Speeding up processes through authorized third parties
helped make the regulatory procedures more efficient
and thus increased the attractiveness of Mexico as an
investment destination for health,” says Geraldine Rangel,
Director General of Healthlinks, a Mexican firm that provides
market analysis to companies wishing to enter Mexico.
SECURING PRODUCTS
The flip side of improving access is maintaining security, a
challenge logistics companies are up to. The distribution
of essential medicines in Mexico is complicated by the
tough geographical terrain and the uncertain security
environment. Many employ distinct methods to prevent
vehicle theft, such as using dual GPS to circumvent
jammers, employing electromagnetic locks and distinct
route planning. “One of the greatest challenges we face
is Mexico’s size, so we must ensure the provision ofan
effective, efficient and continuous service. Security
0
20
40
60
80
100
Breast Cancer
Prostate CancerT2D
201520142013201220112010
DEATH IN MEXICO
80,7
88
82,9
64
5,50
8
5,0
62
5,6
66
5,22
2
5,9
11
5,6
13
6,0
23
5,54
8
6,2
96
5,9
97
6,4
47
6,2
73
85,0
55
89,4
69
94
,029
98,
521
T2D, BREAST AND PROSTATE CANCER DEATHS IN MEXICO (thousands)
� T2D � Prostate Cancer � Breast CancerSource: INEGI
12
Q: In 2016, you declared diabetes and obesity a crisis.
However, FUNSALUD’s José Campillo has said that rates
are leveling off. Is this a success?
A: I cannot yet say that we have had success because the
population is not fully conscious about the dimension of the
problem. Secondly, although there has been a deceleration
of the death rate, there is no decline. The number of deaths
due to diabetes multiplied by about seven times between
1980 and 2015, from around 14,600 in 1980 to 98,500 in
2015. In the 21st century so far, there have been 1.1 million
Mexican deaths directly due to diabetes. This is a grave
problem. We must ensure that the measures that appear
to be effective are maintained. We also must act to protect
young children and teenagers. For this reason, in May 2017
we began the Salud en tu Escuela (Health in your School)
program, which will send doctors to over 1,700 primary and
middle schools to talk about key health topics.
Q: How do you control the various media campaigns
aimed at children and what is the key to promoting
healthier habits?
A: There is increased control over advertising campaigns
that target children, such as for candy, food and drinks.
I agree with President Peña Nieto that health begins at
home. It begins with topics such as hygiene, nutrition
and lifestyle. We need to work with parents because they
must understand that a child of four should not have food
portions equal to that of the father. School is the second-
most important place where children develop good or
bad health habits. The Ministry of Health and the Ministry
of Public Education have an excellent relationship and the
Education Reform will enable us to further improve this.
Q: How effective have public information campaigns been?
A: There is an important link between public campaigns
and health but we have to keep pushing. There have been
great marketing campaigns to raise social awareness in
this country. Going back several decades, there were
intelligent, wonderful campaigns that were strong for
their time concerning reproductive health, family planning
and nutrition. We are continuing this tradition and in 2017
our focus is on diabetes.
Young people are generally healthy, although they must
look after themselves. The elderly are another issue
altogether: the idea of being ill frightens them. They
prefer not to go for check-ups for fear some condition
will be discovered, but prevention is the name of the
game. We have to bet on prevention and this has to be
cultivated from a young age. We used to think that a
chubby child was happy and healthy but they must have
a healthy weight. We must all act.
Q: Life expectancy is increasing. What challenges are
arising for healthcare as a result?
A: Mexico’s population, like many around the world, is going
through a demographic transition. Population pyramids
have changed from 20 years ago when there was a strong
base of young people. Now, the number of old people is
increasing. Forty-five years ago, the median age was 17.8.
Now, it is 27, so we can say that the population is maturing.
Children and the elderly are dependents and there are
just over five million people aged over 70 but that figure
will increase to over 17 million in 2050. Today, a regular
infection can be cured while chronic, nontransmissible,
nonparasitic infections can be controlled. Health is a
process, not a state. Health ranges from the complete
state of physical and mental wellbeing as defined by the
WHO, to a second before death, when health is basically
lost. In between there are many states, some better than
others. If people see health this way, prevention can be
put in place. We want to promote education so that more
people can take control of their health. We must begin to
build processes for healthy aging.
Q: Pollution is an ongoing issue in Mexico that directly
impacts health. What is the Ministry of Health doing in
this regard?
A: We have serious problems in Mexico City, but both
local and federal governments are taking action. We now
have much better ways of measuring pollution levels and
better instruments to measure the impact that polluting
particles have. Some actions taken include the restriction
of vehicles and industrial activity, which limit mobility. The
Environmental Commission of the Metropolis (CAMe) is a
A 121 MILLION PEOPLE CHALLENGEJOSÉ NARROMinister of Health of Mexico
VIEW FROM THE TOP
13
Q: To what extent will the Ministry of Health be working
on reforming medical degrees for young doctors?
A: We are working on a revision at the moment and in
early May we attended the ANFEM assembly. The number
of schools, programs and students has increased greatly.
The number of specialists, however, has not increased
greatly, because there is neither need nor space for
a greater number to train as specialists. We have not
valued the role of the general practitioner. If there are
no positions for general doctors, how can they be hired?
There are organizational aspects of health that must be
reviewed, so we must be clear. The reality of rural Mexico,
where we need doctors, is not attractive to them. We
are speaking only of doctors but there are many other
professions in healthcare. The topic of human resources
is obviously central and so we are working on this.
Q: What are your priorities for 2017?
A: Diabetes is one of our highest priorities, but it is difficult
to tell which is the most important because there are
many, such as cancer and heart disease. When speaking
of priorities, I often speak of diabetes because it generates
the most deaths as a single cause. Cardiovascular disease
may cause more deaths when grouped together, but the
causes are many and can be split into three main groups:
heart attacks, hypertension and others.
Another great issue is pregnancy in girls and teenagers.
Children of 10-14 years old are having babies. There were
400,000 births in 2015 and almost one in every five births
is to a teenage mother. The government has implemented
a national strategy aimed at preventing teenage
pregnancies, which are often unwanted and unplanned.
The consequences are many: families are ruptured, studies
are abandoned, the young girl often has to work and often
the father of the baby disappears and leaves her with the
child or children. We have been working with different
structures since January 2015 on this strategy, which is
being coordinated by the National Council of Population
(CONAPO). Prevention and education are fundamental.
Regarding cancer, the Chamber of Deputies and the
Chamber of Senators in the Mexican Congress has
approved the establishment of the National Register
of Cancer, which will be a powerful tool for delineating
public policies on how to allocate resources and where
the focus should be. Cancer is the third highest cause of
death in Mexico.
coordinating mechanism that includes local, state and federal
levels of government. President Peña Nieto requested that
the commission includes the Ministry of Health.
Q: What challenges arise in ensuring the continuity of
projects after the 2018 presidential elections?
A: There has been much done in terms of health over the
past few years. Under the current government, maternal
mortality has fallen by over 18 percent, infant mortality has
decreased by 6 percent, mortality due to accidents has
also dropped and the frequency of dengue fever has been
reduced by two-thirds. In addition, there have been many
new medicines incorporated into the healthcare system.
Since 1948, the change has been phenomenal. Infant
mortality has decreased by over 90 percent. Back then, 132
of every 1,000 children died before their first birthday. Now,
the rate is 12 of every 1,000. This country has been lucky with
public policy in several programs, otherwise we would not
have been able to achieve what we have. A clear example is
vaccination. For over 40 years we have been dedicated to
vaccinating the population. There is no rubella or congenital
rubella in Mexico, we have controlled diphtheria and tetanus
and neonatal tetanus has been eliminated.
Since 1974, there has been a program for family planning
and now for reproductive health. Thanks to these
programs, Mexico has 121 million inhabitants instead of
over 150 million. There has been an extremely successful
campaign running since the 1980s to protect children
against diseases caused by dehydration. I trust that
even with political changes, current health policies will
be maintained.
Q: What is the Ministry of Health doing to spread its
message on reproductive health to all of Mexico,
including rural areas?
A: We have to make the problems visible or they will
not be solved. We are providing information and
education and we must also provide services. In the rural
environment, we have two mechanisms to spread health
awareness, the first being state governments. Programs
are defined nationally but implemented by the states.
We must also ensure the service is available. IMSS-
Prospera, for example, has services for teenagers in
rural and indigenous environments. We must guarantee
that services to provide condoms, pills and other anti-
contraceptive methods such as salpingo-ophorectomy
or a vasectomy can be offered. Some are more adequate
for young people than others, but for someone that has
already had many children, one of these methods may
be more appropriate. We must guarantee access to
information and to these services for all so that people
can make their own, informed decisions.
Dr. José Narro is a surgeon from the Faculty of Medicine at
UNAM, with a master's in communitarian medicine from the
University of Birmingham, England. Narro was head of UNAM
from 2007 to 2015 and in 2016 was named Minister of Health
14
Q: What are the most important advances COFEPRIS has
made in the past year?
A: We have made great strides on ethics and transparency,
we have become an institution that is much closer to
citizens and we have put 10 catalogues of open data at
their disposal. These are registers of licenses, permissions
and other types of information that was previously
requested of us. We have also installed a telephone
service that receives 16,000 calls per month.
COFEPRIS regularly removes patents from groups of
medicines to allow for the production of generics. In 2016,
we released Group #14 because in February 2016 there was
an issue with influenza and the active substance to treat
it, oseltamivir, was only produced by one laboratory and
manufactured in Switzerland. In May 2016, we liberated
Group #14 and there are now three generics available for
oseltamivir. In total, 37 active substances have been liberated
through our generics strategy, producing 491 generics, which
represent MX$25 billion (US$1.4 billion) in savings while an
extra two million people can be treated thanks to these
savings. In 2017, we will continue with this strategy and more
than 40 new molecule authorizations will be announced. Last
year, Mexico was named Vice President of the International
Coalition of Medicines Regulatory Authorities (ICMRA), an
international association that unites the 14 most important
regulatory agencies, for two years. We are a leader due to
our generics strategy, innovation, reduced processing times
for protocols and special pathways for administrative forms,
which can now be obtained in 15 days instead of two years
as it was five years ago.
Q: How is COFEPRIS working on bringing more knowledge
to Mexico?
A: One of the most important themes internationally is the
creation of the COFEPRIS Center of Excellence. We began
working on this idea around two years ago with the aim
of closing the knowledge gap because knowledge is not
shared in the pharmaceutical sector. Those that have money,
like large companies with the capacities to invest in R&D,
do so in specific areas. But there is a gigantic difference
between the amount of R&D that goes on in developed
countries compared to less developed economies. A first
gap is created here. A second gap occurs because of the
difference in technical knowledge. They want to protect
knowledge and for this reason it is not transmitted. Secondly,
knowledge only reaches those countries that collaborate and
that offer assurances.
As an example, it is doubtful that Brazilian research
centers share their knowledge quickly, efficiently and
transparently with Nigeria because standards are
asymmetrical. We need to improve the flow so that
every country can benefit quickly and efficiently from
knowledge. We aim to contribute to reducing these gaps
as much as possible through a center of excellence. This
was an idea of the WHO and APEC and they should
compile information and generate joint public and private
actions so that knowledge can be shared. Our center has
several research and training projects underway in areas
in which it is difficult to find an expert. There are few other
centers but those that exist are linked. Japan, the US and
Brazil each have one.
Q: According to ProMéxico, Mexico carries out only 1
percent of global clinical trials. How will you boost this
number?
A: In January 2017, we signed an agreement to promote
clinical research that simplifies processes and integrates
them. To meet all requirements and obtain all permits
used to take 365 days but we are reducing this to 45 days.
Our goal is to triple the investment in clinical research in
Mexico and we hope to see US$600 million over the next
two years, up from under US$200 million. An agreement
has been reached with IMSS and ISSSTE will soon join the
program. We are working on another agreement with the
national health institutions and with UNAM. This will no
doubt happen by the end of 2017.
DYNAMIC CHANGES PROPEL MEXICO TO WORLD STAGEJULIO SÁNCHEZ Y TÉPOZCommissioner of COFEPRIS
VIEW FROM THE TOP
The Federal Commission for the Protection against Sanitary
Risks (COFEPRIS) is a regulating authority responsible for 44
cents of every peso spent by Mexican households, 9.8 percent
of GDP and 10.9 percent of foreign trade
15
Q: How do you evaluate which areas should be the main
focus for sanitary authorities?
A: We evaluate which conditions have the greatest
prevalence in Mexico through reports such as ENSANUT,
which was released in late 2016 and covers NCDs. We
use these results to assign resources and generate
biotechnology to solve the most prevalent health
problems in Mexico. We were the first country in the
world to authorize the dengue vaccine and we are in
the process of establishing a protocol for its application.
Q: What results have you seen and what do you expect
from the new pharmacovigilance NOM?
A: NOM-220, which was published in March 2017, represents
a paradigm shift. It implies that many more players are
responsible for pharmacovigilance: the patient, the doctor,
the laboratory, the pharmacy and the distributor. This change
generates more reports that help COFEPRIS to provide a
more punctual and strategic follow-up on the effects and
quality of these medicines. With few reports, all we can do
is check manufacturing plants but with pharmacovigilance
we have more information and this propels change.
Q: What process does the commission use to identify
areas of overregulation and resolve them?
A: We will be working on the third phase of deregulation of
medical devices and we are considering removing regulation
from 10 percent of the devices currently on the market,
perhaps more. This has been presented in international
forums where we have been identified as innovators.
We base our decision on analyses of sanitary risks.
Scientific advances in medical devices means that the
sanitary risks are lowered or eliminated as faster and
more effective solutions are discovered. The sanitary risk
of technology in medical treatment and medical devices
changes depending on technological advances and the
same happens with medicine. There are combinations
that do not generate increased secondary side-effects.
Another element is that we realize that there are delayed
administrative processes. We are digitalizing processes to
avoid unnecessary costs in transport, paperwork and time.
This is part of COFEPRIS Digital, implemented in December
2016, which has taken 99 forms and administrative
processes online. With the extra 50 that we are adding,
we will save 600 tons of paper in a year. All these simplified
processes will help bring us closer to citizens and to provide
a much more agile service. In addition to being based on
reviews, we also perform an audit biyearly, one of which is
focused on our internal quality-management system.
Q: What is the single most important area COFEPRIS will
be focusing on in 2017?
COFEPRIS REGULATES
9.8%of gross domestic product
44¢of every peso spent in Mexican households
10.9%of Mexican trade
152.4 million vaccinesapproved and analyzed to ensure their quality in the National System of Vaccination
74%cheaper than in the US
21therapeutic areas covered
+250 innovators
6,307new registrations
2,242deregulated devices
+6,300medical devices
+500 generics
% of out-of-pocket expenditure of total health spending
42
40
41
20142012
71%of mortality
causes covered
1,998,202additional
patients treated
61%price reduction
COFEPRIS RESULTS (2012-2016)
Source: COFEPRIS
A: My mandate is to protect public health. If I had one
dream for 2017 it would be for the population to be closer
to us, to consult us, to give us a chance and to call us. It
would be wonderful if before citizens took a decision of any
kind, they first looked after themselves and consulted us.
To ensure this message reaches all of Mexico, we have an
amazing program called Seis Pasos de la Salud (Six Steps
of Health) that is translated into 17 indigenous languages.
It will see a new component with the Ministry of Public
Education through which we will soon reach schools.
16
Q: How has the pharmaceutical industry evolved in the
past two years?
A: I think it has evolved well and regulation has continued to
advance. The structure of registration has been simplified so
that time targets set out in the law are met for any process
involving the sanitary authorities. This is an important advance
that has allowed the pharmaceutical industry to be more
competitive in Mexico and in international markets. Being
recognized as a regulatory agency has allowed COFEPRIS
to be much more agile in registering products in Central and
South America.
In terms of R&D, we have authorized a series of third parties
to be much faster in clinical authorizations, which will allow
Mexico to become a center of clinical research. In economic
terms, the market has maintained 3-4 percent yearly growth
over the past decade, a rate that will probably not increase as
the market is mature and grows in line with the population. The
export market has grown in double digits and will continue
to do so thanks to COFEPRIS, which has been recognized as
a national regulatory reference agency in Central and South
America. Companies have this advantage in addition to GMPs.
Thanks to economies of scale, the Mexican economy is more
competitive and can export to these other regions.
Q: How has the new pharmacovigilance NOM affected
companies and how easy or difficult is it for companies
to adapt to it?
A: The new norm offers patients security and provides faster
product registration. If a drug does not have any reports
of major adverse effects caused by the pharmacovigilance
NOM, then registration can be renewed quickly. The NOM
also commits other parties such as doctors and patients to
reporting adverse effects. It is no longer the sole responsibility
of the industry. It will cost the industry more but we think
we will reach an agreement with the authorities on what is
necessary and what is desirable.
Q: How is CANIFARMA helping the industry homogenize
its regulation with the FDA and EMA?
A: They are already homogenized. There is not much
difference between the regulation that exists in Mexico and
those countries. Existing regulations and laws in Mexico are
not insufficient; all that is lacking is evidence that they are
being followed. Having them written is one thing, ensuring
compliance is another. The recognition from the WHO and
PAHO of Mexico in terms of vaccines provides certainty that
the role is being fulfilled. COFEPRIS has to report evidence
of verifications and certainty of reports. Tracking may be
different in the US and Europe, but we are still missing an
agreement with the FDA and the EMA on a bi-dimensional
code that can be applied worldwide.
Q: What advantages does Mexico present for clinical
research, other than its large population?
A: In Mexico, most R&D is carried out in private centers. The
main issue is researchers being paid to carry out the studies.
There is a promising environment in IMSS to incentivize
clinical research in Mexico, sponsored by the industry as
there were issues with IP. This has been changed. Previously,
if IMSS found a second use then the IP belonged to the
agency. But an agreement has been reached so that the
IP does indeed belong to the industry sponsoring the
research. The advantage is that there are 50 million patients
in IMSS with varying stages of disease because in Mexico
there is no culture of prevention, which means diseases are
available for study at advanced stages that may be hard to
find in other countries.
Q: What other steps are being taken to boost clinical
research in Mexico?
A: IMSS, COFEPRIS and CANIFARMA are on the verge
of signing a contract to facilitate the path to clinical
research. During our CANIFARMA Awards 2016 we
announced that a research fair would be held during
which companies will be able to have direct contact
with the companies that won the awards in 2016 and
2015, to allow the research to be taken to market. Julio
Sánchez, Commissioner of COFEPRIS, has announced
he will support this with a certificate and the research
will be followed by COFEPRIS from the beginning. This
will contribute to further improving the relationship with
the industry. Brazil and Argentina are Mexico’s biggest
competitors in clinical research in the region. The fact
SIMPLIFIED REGISTRATION BOOSTS MEXICO PHARMA MARKETRAFAEL GUALDirector General of CANIFARMA
VIEW FROM THE TOP
17
Q: What area will you focus on in the future?
A: Previously, a product had to be registered every five
years. We are working on a scheme that will allow changes
in a product to be recorded before its five years are up,
as the current process created bottlenecks at the end of
five years. Many products are modified slightly and this
will allow companies to reregister it as soon as it happens.
that we have a large number of patients to register in a
clinical trial aids our competitiveness worldwide. Mexico
can increase patient numbers greatly if we make the most
of IMSS. Brazil and Argentina are more agile.
Q: What are the biggest challenges in the human pharma
industry?
A: We need to become an important center for clinical
research because its potential is underused and we have
to consolidate COFEPRIS’ recognition to open new markets
for the industry. There is great quality in the products
manufactured in Mexico and they are competitive. In
addition, we need to continue consolidating regulations.
I would add access, which is one of the main issues in the
country, including new technologies which, despite having a
greater cost, can bring increased benefits to the population.
We need to facilitate this access in IMSS, ISSSTE, CSG
and the National Formulary and I personally believe that
opening clinical research in IMSS will facilitate the inclusion
of new technologies, because having done the trials will
shed light on the benefits they can provide in comparison
to current medicine.
Q: What are the biggest challenges in the veterinary
pharmaceutical industry?
A: They are extremely different. First, because there is
no animal social-security system and there is no worry
of incorporating new technologies. Challenges are more
related to competitivity and access to international markets,
as the market has been conservative in worrying only about
the Mexican market. There are many multinationals here
that are growing. The main issue is the topic of pure salts
in food mixes. If a farmer administers pure salts instead of
the correct medication it will cause problems. There are
also issues with antibiotic resistance due to residue in food.
There is no pure clenbuterol medicine for example, only
medicine that contains traces of it. Sadly, we do not have
the muscle in Mexico to create a regulation around this.
Q: What role do you play in investigations such as that
of COFECE?
A: We give COFECE the information it requests but we
do not have a proactive role. We clarify the panorama of
the pharma industry. There are topics such as prices that
are forbidden for discussion during any of the chamber’s
meetings. In every act it says that it is forbidden to exchange
commercial information. This legally binds the chamber and
its members to avoid these issues, so we provide requested
information. We are asked for example why all expired
patented products do not have generic alternatives. It may
not be commercially viable, it may be a difficult product to
create or the ingredient source may be unique, and this is a
worldwide condition. If the patented product is interesting
enough for a generic to exist, it will.
The National Chamber of the Pharmaceutical Industry
(CANIFARMA) works toward developing the industry in Mexico
with three main objectives: sanitary regulation, research and
innovation and economic development and industry policies
The market has maintained 3 to 4 percent yearly growth over the past decade
MX$200 billionis the current value market of the Mexican pharmaceutical industry
50%of CANIFARMA employees have higher education
degrees
JOBS CREATED BY COMPANIES AFFILIATED TO CANIFARMA (thousands)
Sources: COFEPRIS, CANIFARMA
0
50
100
150
200
250
300
IndirectDirect
CANIFARMA ACHEIVEMENTS
NOM - 241 on GMPs
was revised for medical
devices
Changed regulation on advertising
Established an institutional relationship
with COFECE
2013-2018 development
program for the pharmaceutical
industry - results so far
Created the CANIFARMA Award to encourage research on the most significant causes of mortality
Two new NOMs established: NOM - 059 for GMPs for medicinal products and NOM - 164 for GMPs
for pharmaceutical products
Processing times
shortened
79,0
00 30
0,0
00
18
Q: Research, development and innovation are AMIIF’s top
three core values. Which is the most important for 2017?
A: Innovation is always at the top of the agenda. It is the
reason why we exist and we have been working on this. The
goal of AMIIF’s 2024 vision, its midterm plan for innovation,
is to contribute to improving Mexico’s productivity and
competitiveness through pharmaceutical innovation. That
is our key goal. As President Peña Nieto has said, we are
experiencing a renaissance for innovation. For example,
hepatitis C products, which have a 95 percent rate of cure,
have just been approved for inclusion in the public health
system, which is an incredible breakthrough. There are new
treatments in HIV and patients are living almost as long as
nonpatients and with minimum side-effects. There are also
new innovations in cancer treatments.
One issue for pharmaceutical innovation is how to finance
it. We sat down with IMSS and now we have three teams
working with the institution to establish innovative access
models based on patient health outcomes. The project
began between February and March 2017. Our first group
is working on the analysis of the cost to the system and the
epidemiological impact of the main therapeutic areas to be
prioritized in this project (potentially: diabetes, cancer and
cardio-vascular diseases). The objective of the second group
is to analyze new performance indicators and criteria to align
patients and institutional needs in said therapeutic areas.
The third group is a legal team discussing how and when the
government could be able to implement innovative access
models, aligned with the proper legal framework. Financial
and legal experts and doctors also attend these meetings.
We are also looking at how we can bring in more resources
via clinical research. In January 2017, there was an agreement
made between all parties with President Peña Nieto present.
Its objective is to increase investment in the sector from
around US$250 million to above US$600 million. A meeting in
early May 2017 brought together COFEPRIS, IMSS, ISSSTE, the
decentralized institutions, ProMéxico, the Ministry of Economy,
SAT, Customs and the industry. We will have monthly meetings
to provide updates on each area, understanding that by the
end of 2017 we should have a better process for getting
protocols approved to bolster the amount of funds coming
into Mexico.
A pillar of increasing access to innovation is to make
understood its potential impact on productivity and
competitiveness. Last year, we presented a study with the
automotive industry in Guanajuato, which tried to show the
impact of lost productivity on a sector. In the case of the auto
industry, the impact of lost value was around 7.3 percent of
the industry’s value, of which 1.3 percent was absenteeism and
6 percent was due to presenteeism. We are close to the big
employers such as the Business Coordinating Council (CCE),
COPARMEX and CONCAMIN to make sure that everyone has
a voice in making sure our health system, social security and
Seguro Popular deliver a better job.
Q: How much awareness remains to be raised among
governors?
A: At the beginning of May 2017, Dr. Narro, Minister of Health,
attended our board meeting for the first time. He said that
health and education are the two highest social equalizers. At
the federal level, we have done a great job and awareness is
COLLABORATE TO INNOVATECRISTÓBAL THOMPSONExecutive Director of AMIIF
VIEW FROM THE TOP
The Mexican Association of Pharmaceutical Research
Industries (AMIIF) encompasses over 40 of the leading
pharmaceutical and biotechnological research companies in
Mexico and aims to promote innovation in the health sector
The objective of the agreement is
to increase annual investment in
clinical research from around
US$250 million to above US$600
million
19
A: We hear a different version every day, from modernization
of NAFTA, which is something we want and that the
government is clear about in its position, to removing it
completely. Although we do not know what will happen, we
are prepared for various scenarios. The chairman of GE was
here in May 2017. He made it clear that NAFTA was very good
and he said that the big employers need to start speaking up.
I think they will start coming out and saying that yes there
are areas for improvement but overall commerce is highly
integrated. How can it be disintegrated? Impossible. The
companies here have been present for many years and they
will not go back. It the treaty collapses, we will not see major
issues, unless a tax is imposed on imported products, but
we do not think that will happen. Overall, NAFTA has been
beneficial for all three countries and I am sure renegotiation
will center on optimization and on areas that did not exist
when it began, such as e-commerce.
Q: How does the Accelerated Access initiative decided in the
WEF in Davos this year complement AMIIF’s 2024 vision?
A: This is a huge initiative. Top pharmaceutical companies are
joining together to develop a common framework that will
help patients and countries battling NCDs in low and middle
income countries. The industry is talking about looking for
a full, holistic approach to the health system, trying to find
ways to make overall improvements and enabling medicines
to patients. For example, 300 billion units of medicine
are donated every year to Africa, but it lacks distribution
infrastructure. What we are implementing in Mexico is already
a step ahead of what my colleagues in other countries tell me.
Q: What will AMIIF focus on in 2017?
A: Our main focus is how we can grant greater access to more
patients. We will be finalizing steps to attract more investment
to clinical research, to keep working with COFEPRIS to
continue improving timings and processes for approvals of
new molecules and finally to maintain the current standards
of IP protection.
higher than it was three years ago. Having said this, budgets
were cut last year, showing that although there is awareness,
this does not correspond to action yet.
At the governor’s level, we have to improve awareness.
Investment must be holistic: people must be healthy and with
a good level of education. They must have infrastructure and
public services, but there must be a good health system too.
We have been asked by the Ministry of Economy to undertake
another study like the one we did in Guanajuato, a state that
is growing at 6-7 percent per year. If employment continues
to grow but the health system does not keep pace, there will
be a bottleneck, a problem of too much success too quickly
but with a gap in these kinds of public services for workers
and their families. Again, investment usually goes to places
with good infrastructure. If this is not addressed, there will be
limitations in economic development.
In May 2017, Mikel Arriola, Director General of the IMSS,
announced tests in Nuevo Leon in which IMSS would follow
up on company employees to see who was at high risk and
to begin taking preventive measures early on. The more
information we can give the government, the better.
Access to innovation is low, as only 10 percent of innovative
medicines approved by COFEPRIS are in the public health
institutions. Early diagnosis and secondary prevention is much
less expensive than waiting five years for patients to get out
of control. Then, by the time you give them innovation, the
cost will still be too high. In Guanajuato, we asked companies
what they were given from the government: land and tax
incentives. They did not think to ask about health. Getting
the big employers onboard is a big part of the agenda and
this will resonate when we hold events. Investment will come
but states have to look at how to maximize that investment.
Q: A renegotiation of NAFTA is likely. What will AMIIF’s top
priorities be?
Hemophilia research
20
The Mexican Association of Innovative Industries of Medical
Devices (AMID) aims to promote efficient and transparent
regulatory and procurement processes and to ensure safety,
quality and effectiveness of solutions in healthcare services
Q: AMID was created to eliminate “regulatory challenges”
in the industry. What are the biggest problems?
A: AMID was indeed created for regulatory reasons to
bring products to Mexico. COFEPRIS was the main focus
of our efforts for around eight years. Our agenda is now
broader and our main focus is access: how to collaborate
with authorities to gain advances for patients and be a
more productive country based on investment in health.
We also have an ethics and compliance committee because
we must ensure these practices are the best they could
possibly be in Mexico while trying to establish the same
rules as in Europe and the US. We are also working against
the black market. We want products to be controlled and
traced from the point they leave the manufacturing site to
the point they are implanted in a patient. Finally, we are
working on being known as a reference in healthcare in
the same way as the pharma industry.
Q: How have medical device trends evolved since 2015?
A: Products now have a shorter innovation cycle than 15-
20 years ago. There is an increasing number of players
with new technological processes, including Big Data.
Consequently, the government faces the challenge of how
to evaluate them and ensure that the most innovative
medical devices reach patients. Now, from releasing a
product to releasing its next generation, there are only
two or three years and the evaluation system for new
products is not used to working with such short time
frames. Medical devices account for 70-80 percent of
sanitary registrations in Mexico. How to evaluate them
and the cost/benefit over time is a new challenge for any
government, including Germany and the US. The main
challenge is bringing these devices to the country.
Q: What is the impact of the black market, which is
usually associated with pharmaceuticals, on medical
devices companies?
A: The impact of the black market may not be as large
in medical devices as in pharma but there are medical
devices that cross borders illegally without the proper
temperature controls and distribution procedures.
Appropriate techno-vigilance needs to be implemented.
It is not that devices are copied like in other industries;
for example, many are bought abroad and brought
across the border without the correct quality protocol
and temperature control, or a hospital may throw away
devices and they are fished out from the trash.
We have an agreement with COFEPRIS: if we find out
about the sale of illegal products, they act immediately
to remove them from the market.
Q: How are AMID members impacted by COFEPRIS’
deregulation of medical devices?
A: We have always had good channels of communication
with COFEPRIS, but in 2016 and 2017 AMID planned a
full schedule with them. They are working on the third
package of deregulated medical devices. The first came
through in 2011 and the second in 2014. This deregulation
is simply recognizing that certain products used in medical
practice are not medical devices and as such should not
be regulated by COFEPRIS. There are some companies
that are part of AMID that commercialize these products,
but they are merely components of medical devices per
se. This causes a problem as the number of devices in
the market is multiplied by the number of side products
that are produced. COFEPRIS was saturated by regulating
these products they never needed to. These deregulation
PROMOTING THE MEDICAL DEVICES SECTOREDGAR ROMEROPresident of AMID
VIEW FROM THE TOP
Medical devices account for
70-80 percent of sanitary
registrations in Mexico
21
designed before the corresponding regulation. At this
moment, the challenge is how to evaluate innovation
faster. We are behind when compared to similar countries
such as Colombia, Chile, Brazil and Argentina.
Q: How are global economic conditions impacting
imports and exports of medical devices?
A: Since the Mexican peso depreciated against the dollar,
it has been an industrywide worry but companies plan
on a long-term basis. The peso appreciated against the
dollar in the first three months of 2017, strengthening
from MX$22 to the dollar to MX$19. There has been an
impact on profitability but we need to think long-term
and see this trend through. No company has shown
genuine concern or considered leaving the country.
AMID associates are projecting growth above 9 percent
in sales during 2017 and expectations for 2018 remain in
a good health. In addition, AMID is ensuring its presence
in free-trade negotiations such as NAFTA. We are
being present as an industry to ensure the continuation
of adequate conditions. We generate US$8 billion in
medical devices exports but we export 92 percent of
that to the US. The medical-devices sector is considered
an emerging economic area for Mexico, along with IT and
pharmaceuticals.
Q: What will be AMID’s main focus for 2017?
A: During the second half of my presidency, we will
focus on finishing our work with the CSG to improve
patient access to medical devices for better diagnostics,
treatment, prognosis and the patient’s quality of life.
AMID will also continue promoting ethics and compliance
in the healthcare industry. We grew from 23 to 30
companies last year thanks to a broader agenda and we
now run several agenda items in parallel, which enables
us to get more done.
packages are a list we share with the authorities of these
accessories that can be deregulated. We are responsible
for 80 percent of COFEPRIS’ sanitary registers and as
innovation cycles decrease, their workload increases.
Deregulating these items is good because COFEPRIS
can use its time to check true technological innovations
instead of regulating these other products. This will
increase investment in innovation because less time
needs to be spent on other things.
Q: What regulatory points are you lobbying for to
improve access?
A: The toughest part of gaining access is going through
the CSG. We are asking them to make their processes
simpler and to implement the most adequate rules
possible for medical devices as the current rules were
designed for pharma. If we followed pharma’s rules,
we would have to innovate at the same rhythm as that
industry, which is much slower. We have been working
with the CSG since 2016 and we have just begun our first
efforts with the IMSS on a process level. They have the
ability to define whether or not a product will reach a
patient through public hospitals. We are looking at how
we can help make this process faster.
Of the three stages of approval (COFEPRIS, CSG and the
institution), CSG is always the hardest for us. The process
can take up to four years, while an ideal process takes
two to three years. We want to implement this time frame
for everyone, regardless of their product, and we want to
make the approval process predictable so that everyone
follows the same steps. This is an additional challenge.
If the innovation cycle shortens but approval still takes
the same amount of time, it becomes unprofitable to
create new products; by the time a product is approved
a second generation is already available, so we have to
try and gain general approval. In summary, innovation is
22
Q: In 2016, FUNSALUD established diabetes, breast
cancer, obesity and mental illnesses as priorities. Have
these changed in 2017?
A: Our priorities remain the same because these
conditions have a high incidence and involve a great cost
to society and the country’s finances. At the end of 2016,
Minister of Health José Narro declared diabetes a health
emergency. It was an atypical statement because there
was intention to take drastic action but only to emphasize
that diabetes is a serious national public health problem.
At the end of 2016, the ENSANUT survey was released.
It measures obesity, overweight and diabetes prevalence
among the Mexican population. In some segments, which
vary between urban and rural communities, rates begin
to stagnate rather than continue shooting upward.
However, there is another hypothesis: we are reaching
saturation levels where things cannot get any worse. In
2017, emphasis should be placed on the prevention of
diabetes and its complications. Data from this survey
show there has been a 175 percent increase in diabetic
foot amputations.
Q: Are citizens more aware now than before of this type
of complication?
A: I do not think the population has that information and
if it does, it has not resulted in a lifestyle change. This
is the main challenge of a problem that is multifactorial
and that depends not only on food but on life habits. A
change in the population’s mentality is required.
Q: The IMSS estimates that in the next 35 years the
number of patients with diabetes in the country will
double. Do you agree?
A: There are many possibilities. In addition to the 6.5
million diabetics diagnosed it is thought there is almost
the same number undiagnosed, so the logical thing is for
The Mexican Foundation for Health (FUNSALUD) is a private
institution that aims to contribute to the improvement of
health in Mexico by being a reference point for the discussion
of the health agenda
prevalence to increase. FUNSALUD has corroborated this
number with its own studies. In 2013, we estimated that
the cost of diabetes would be MX$362 billion (US$20.1
billion) per year or 2.3 percent of national GDP. This figure
will continue to grow and there may come a time when
the public sector does not have the economic, technical
and human resources capacity to deal with this tsunami.
Q: Which countries can Mexico look to for a way to
attack this epidemic?
A: Chile and Costa Rica are seeing good results, although
the comparison in terms of population is different.
European countries like the UK also have good models.
However, we are seeing the problem in all countries,
which is due to urbanization, lifestyle changes and
consumption habits. I think Mexico, the country with the
highest obesity rate after the US, could be the place to
experiment with immediate action. One action should
be to increase clinical research, especially for economic
reasons. It is a gigantic global market in which Mexico
does not even reach 0.1 percent and needs to be
improved. Mikel Arriola, Director of IMSS, is convinced
of this. The industry is also ready and COFEPRIS is at
the best moment in its history, with great international
recognition. Mexico can be an important crucible to start
doing scientific research on diabetes that provides us a
favorable cost/benefit ratio. In 2017, it would be desirable
for the Ministry of Health to take the lead to carry out a
concerted policy with the Ministry of Economy and the
Presidency of the Republic. Ties with the industry exist
thanks to the great work carried out by COFEPRIS.
Q: What has changed in the last 12 months in relation
to conditions such as breast cancer or mental illness?
A: The capacity of care for these diseases has increased.
However, budgetary or political considerations have
meant that these are no longer priorities for the federal
government. In terms of breast cancer, much progress
has been made in perception and detection. The
pharmaceutical industry is shielded from any political
aggression by the current president of the US and the
Ministry of Health is at the core of the solution. By
DIABETES AND OBESITY: HEALTHCARE PRIORITIESJOSÉ CAMPILLOExecutive President of FUNSALUD
VIEW FROM THE TOP
23
everything, appears in none of them. It is an element
that is systematically forgotten but without a healthy
population there can be no healthy economy. The priority
for 2017 should be to place health at the heart of any
strategy, which is not easy.
Q: To what extent are doctor’s consultancies in
pharmacies a solution or an externalization of the
problem of health access?
A: Their existence tells us many things. It is a phenomenon
that appeared spontaneously to solve problems that
should have been resolved by the government. However,
waiting times are shorter and care is personalized,
inexpensive and close. They are a tool that depends on
us to make them favorable or harmful. There are about
15,000 offices and they must be taken into account.
Now, ethical principles have to be established as well as
a register of patients and greater communication, among
other elements. FUNSALUD wants to make a substantive
proposal in this regard in 2017 in which we will try to
bring together government, academia and industry to
conclude a document in 2018. Emphasis should be placed
on the first level of care.
improving the health of the working population, great
savings will be made.
Q: Universal access to health is a goal of FUNSALUD.
How is the Ministry of Health working toward that goal?
A: Universality is not a utopia but an obligation. Family
wealth should not be affected by healthcare. It is an
inalienable universal right that cannot be postponed.
The conditions of the country in 2017, and perhaps for
the next five years, are going to be very adverse, so we
have to rethink proposals to reinterpret the reality and
be precise in our aspirations. The most important part is
to ensure prevention and first-level care. One of the main
problems is that the model we followed was seen from
the perspective of the disease and not from health; we
have been curing and not conserving health. We need a
policy of prevention.
Q: How will budget cuts affect the goal of achieving
universal access to health?
A: Recently, an agreement for the protection of the family
economy was signed and four strategies were proposed
but the health sector, which should be the beginning of
The Pulmovista 500, an electrical impedance tomography system performing respiratory monitoring
24
INSIGHT
“There is a challenge for Mexico and other Latin American
countries that have concentrated epidemics,” she says.
“We must develop different approaches for each group
and control all of them at the same time. It is easier to
fight generalized epidemics because we can offer a blanket
service to the entire population.”
According to CENSIDA statistics, one out of every 1,500
women lives with HIV. Other affected groups include
0.07 percent of pregnant women, 15 percent of men who
have sex with men, 18 percent of transgender people and
6 percent of people who inject themselves with drugs.
Two years ago, CENSIDA started developing a National
Detection Campaign in alliance with civil organizations with
the objective of reducing the number of people infected
with HIV. “We are one of the areas of the Ministry of Health
that works the most with civil society, as well as working
with hospitals and managing the treatment of the majority
of the patients in the country,” says Magis.
The institution is in charge of purchasing and distributing
drugs for 66 percent of patients with HIV and it receives
MX$3 billion (US$166 million) every year from the Fund
for Prevention of Catastrophic Expenses (FPGC) to buy
medication. There are 138 Prevention and Attention Clinics
for AIDS and Sexually Transmitted Infections (CAPASITS)
across the country that provide treatment to 85,000
patients who are living with HIV but who do not have social
security. CENSIDA finances the social projects awarded in
the tenders, which cost around MX$100 million (US$5.6
million) per year to improve HIV detection and prevention
among key populations. In an effort to eliminate the HIV
epidemic, UNAids declared a 90-90-90 treatment target
by 2020: 90 percent diagnosis, 90 percent treatment and
90 percent viral suppression.
Regarding perinatal transmission, healthcare institutions
began offering the HIV test to every pregnant woman, which
has helped reduce newborn transmissions to 46 percent. In
2015 there were only 71 cases but the aspiration is to follow
in Cuba’s footsteps as the only country in Latin America
that has successfully eradicated perinatal transmission. The
The concentrated nature of the HIV epidemic in Mexico
creates unique challenges for the agency tasked with
eradicating the disease, the National Center for Prevention
and Control of HIV and AIDS (CENSIDA). While the country
continues to mark milestones in control and treatment, the
disease's 'very diversity hinders progress.
“The infection has different dynamics depending on
every state’s heterogeneity and social habits,” says Carlos
Magis, Integral Care Director of CENSIDA. This diversity is
a wakeup call for health institutions because even though
it seems to be generally in control, there are concerns
in specific areas.
CENSIDA has three main objectives: eradicate perinatal
HIV, control HIV via sexual transmission and reduce new
infections through intravenous drug use. The institution
has implemented plans for each type of transmission. The
center is the main governing body for the management
of the epidemic in Mexico and is in charge of providing
treatment to patients. According to the institution, in
Mexico HIV blood transmission is eradicated and perinatal
transmission is almost eliminated. Health institutions
have also reached 63 percent detection, a reduction in
new infections and they are close to achieving UNAids’
treatment goal of 90 percent by 2020.
Patricia Uribe, Director General of CENSIDA, says Mexico
has a concentrated incidence among certain social groups:
gay men and other men who have sex with men (SMS),
transgender people, sex workers and their clients, prisoners,
migrants and people who inject themselves with drugs.
There are 138 Prevention and Attention Clinics for AIDS and Sexually Transmitted Infections (CAPASITS) across the
country
FIGHTING HIV EPIDEMIC MEANS FIGHTING DIVERSITY
Carlos MagisIntegral Care Director of CENSIDA
Patricia UribeDirector General of CENSIDA
25
challenge is in targeting states with more women. “It is
an issue in states that are demographically more female
such as Chiapas, Guerrero or Veracruz, while in Morelos
eradication was accomplished in 2011,” says Magis.
In terms of sexual transmission, Uribe says this is one of
the biggest challenges as many people do not use or have
access to effective prevention methods and comprehensive
harm-reduction services. CENSIDA has created campaigns
against sexual transmission with different focuses
depending on the social group. “Our most critical are
teenagers because they are becoming sexually active and
they do not have all the information they need,” she says.
For this campaign, the main message is usually to avoid
unprotected sexual relationships but that is not always
effective because strategies for women and vulnerable
populations are different, explains Uribe. “There are
women who are infected by having sex with their partner
so targeting for the test demands us to consider gender-
inequality issues and to address social determinants such
as access to health services, education, employment and
gender violence.”
In the case of transmission through intravenous drug
use, CENSIDA has designed specific projects for this
demographic. However, as Uribe explains, it is a challenge
to provide these patients with safety measures because it
may be mistaken for promotion of drug use. “This type of
transmission is not an issue across the country, it is focused
in the north, in cities like Tijuana and Juarez City, and it has
started to spread to Guadalajara,” says Magis.
The efficacy of these programs and CENSIDA’s access,
coverage and treatment-quality care can be measured
by mortality rates. There are peaks in certain parts of the
country such as south of Veracruz, Tabasco and Campeche.
These states have 10 deaths per 100,000 infections, while
in the center of the country there are four per 100,000.
Magis says that many AIDS deaths occur because of late
treatment. “This infection has a lot to do with addictions
and sexual diversity, which is directly related to a
discrimination stigma, so many people are reluctant to ask
for help,” he says. The results from the most recent national
discrimination survey held by CENSIDA in 2010 showed
the biggest discrimination in Mexico is against those with
HIV and AIDS and members of the LGBT community. “It
is particularly important to eliminate discrimination and
gender inequality because this prevents us from achieving
the impact we need,” says Uribe.
The CENSIDA Director General acknowledges that HIV and
AIDS have forced healthcare institutions to innovate their
approach to health issues. “We have to deal with topics that
were not covered before, like sexual diversity, sex work and
intravenous drug use,” she says. “Society sees us as an open
window to promote other aspects besides HIV.”
The specialized Clinica Condesa in Mexico City is a clinic
for transgender patients that not only treats HIV but it also
helps in the process of undergoing sexual reassignment.
CONASIDA was also established to discuss HIV and AIDS-
related topics with representatives of civil society who
provide ideas to deal with problems.
Paradoxically, keeping up with all these improvements
becomes a threat as patients’ life expectancy increases
at the same rate as treatment prices. According to
CENSIDA, in 1985 survival was one year but today a patient
diagnosed with HIV and who begins treatment can survive
for approximately 44 years. Right now, 91 percent of HIV
treatments are ambulatory and patients frequently receive
vaccines and odonatological, nutritional and psychological
care, which has improved their life quality.
“Every year, our detection rates increase, meaning we have
more patients and the MX$3 billion (US$166 million) budget
rises by MX$500 million (US$27.7 million) every year,” says
Magis. He says HIV is one of the most expensive diseases
covered by the FPGC because it has no cure, which means
patients require lifetime treatment. The high cost of HIV
is also due to the antiretroviral patent scheme. There is
no control over drug prices in Mexico, explains Uribe, due
to the Mexican acquisition law that protects patents. “The
pharmaceutical price for the most used drug for HIV in
Mexico is four times higher than the manufacturing price,
at MX$2,500 (US$138) per month for every patient,” he
continues. “In Africa, the drugs are sourced from generics
labs and the cost is MX$200 (US$11) per month. We have
to create a dialogue between COFEPRIS and the authorities
that negotiate the treaties.”
CENSIDA
0 50 100 150 200
viral supression
in treatment
diagnosed
estimated total of people with HIV by 2015
MEXICO'S PROGRESS ON MEETING THE UNAIDS 2020 GOAL (thousands)
� 2015 � UNaids Goal 90%
Source: CENSIDA
26
0 1 2 3 4 5 6 7 8 9 10 11
Belize
Panama
Data not available
Mexico US$11.2 billion
Ecuador US$1.6 billion
El Salvador US$527 million
Costa Rica US$835 million
Colombia US$3.3 billion
Chile US$3.3 billion
Peru US$1.6 billion
US$1.18 billion
PHARMA MARKET IN 2015
Recognizes COFEPRIS since
COFEPRIS BREAKS DOWN BARRIERS
One of the reasons Mexico is such an attractive destination
for foreign companies, other than the size of its population
and its growing economy, is the fact that its main sanitary
regulatory agency, COFEPRIS, is recognized
by the WHO and by other Central and South
American countries. A product that has
successfully obtained registration in Mexico is
much easier to launch in Costa Rica, Colombia,
Ecuador, El Salvador, Chile, Panama, Belize and Peru. This
makes Mexico an ideal springboard from which to begin a
Latin American expansion for big multinationals.
Sources: World Bank and BMI Research
0.4 Caribbean Public Health Agency (CARPHA)
Belize
6.1 Medicine and Sanitary Product Administration
El Salvador
16.1 National Agency of Regulation, Control and Sanitary Vigilance (ARCSA)
Ecuador
4.8 Sanitary Product Regulation Administration (DRPIS)
Costa Rica
3.9 National Administration of Pharmacies and Drugs (DNFD)
Panama
48.3 National Institute of Vigilance of Medicines and Food (INVIMA)
Colombia
18 Instituteof Public Health
Chile
31.4 General Administration of Medicines, Consumables and Drugs
Peru
MEXICOPart of the Pacific Alliance
121 millionHome regulatory agency:
Federal Commission for the Protection Against Sanitary
Risks (COFEPRIS)
PART OF THE PACIFIC ALLIANCE
COFEPRIS AGREEMENTS
MILLIONS OF INHABITANTS
2012
2013
2014
2015
Since being recognized as a regulatory agency by the WHO,
over the past five years several Central and South American
countries have followed suit, increasing Mexico’s attractiveness
as a Latin American base of operations
INFOGRAPHIC
REGULATORY AGENCY
27
Q: What are the main priorities for UN Women Mexico?
A: We have three priority areas. The first is the participation
of women in government and in leadership roles. Mexico is
one of only eight countries worldwide with electoral parity;
in fact, 42 percent of parliamentarians are women. However,
there is only one female governor and in the private sector
the percentage of female CEOs is only 5 percent.
The second area of priority is economic empowerment.
According to INEGI, in 2016 only 43 percent of women in
Mexico participated in the workforce, compared with 78
percent of men, so we need to increase the number of
employed women, promote formal jobs and end the wage
gap. UN Women projects that it will take around 80 years
for women to achieve workforce equality.
Our third priority is to increase women’s autonomy
regarding health by providing universal access to sexual
and reproductive care and by ending gender violence.
Q: What are the main health concerns for women in
Mexico?
A: PAHO and UN Women's health division are mainly worried
about three situations. The first is teenage pregnancy. We
are working on a campaign with 12 UN agencies called De
la A a la Z (From A to Z), from Aguascalientes to Zacatecas.
The campaign promotes awareness of freedom of choice
regarding marriage, because in Mexico one in every five
women marries before the age of 18. Another priority in
terms of public health is the lack of access to healthcare
and pension funds for women who work in the informal
sector. This is also the situation for all those women who
have to stay at home to take care of family members. In
Mexico, more and more people are living longer while
suffering from chronic diseases and women are usually
responsible for their care. According to the census, in
Mexico around 30 million people need permanent care, 3.5
million have a chronic disease, 1.2 million have a disability
and a large percentage of the 10 million adults aged over
75 require special care. Our third health concern regarding
women is gender violence, which is the clearest expression
of inequality.
Q: What has the campaign HeForShe achieved in Mexico?
A: HeForShe is a platform that seeks the commitment of
men in the struggle for equality and already has more than
110,000 individual memberships in Mexico. In addition, many
universities have integrated the platform. For example,
UNAM has committed to imbue their health faculties with
a stronger gender perspective on public and individual
health. IMSS has also proposed more in-depth training for
their health professionals to closely monitor compliance
to NOM-046, a regulation that obligates health services to
detect and prevent violence against women and to offer
safe and legal abortions for victims of sexual violence.
Q: #noesdehombre (#notamanthing) was the first
campaign directed at men to raise awareness of sexual
violence. How effective was it?
A: It was a campaign in collaboration with Mexico City that
focused on preventing violence on public transport. The
elaboration of the campaign was based on a study done
by the Mexican college that showed that most men who
perform violent actions in public spaces do not consider
it violence.
Q: What needs to be done achieve more impact of the
awareness against gender violence?
A: When we talk about gender sexual violence, something
very perverse happens, which is to say that women are
blamed for it and sometimes rape is justified because
of the way the woman was dressed or because she
was alone. We worked with the government to create
a public program that ends impunity. There is a feeling
that violence is not an issue because not many cases
become public. However, we are working with the Ministry
of Interior to get more answers from the media. Most of
the attention on the topic comes from campaigns on
social networks.
THE COMPLICATED ROAD TO EQUALITY
ANA GÜEZMESMexico Representative of UN Women
VIEW FROM THE TOP
UN Women was created by the United Nations to promote
gender equality and the empowerment of women. In Mexico
it focuses on the promotion of women's access to healthcare,
participation in government and eradication of violence
28
Q: What is UNICEF’s approach to combating child obesity?
A: Figures demonstrate that 95 percent of obesity cases
are attributed to poor nutritional patterns, therefore, the
main priority to fight childhood overweight and obesity
lies in campaigning and advocating good habits, but
also in promoting breastfeeding, water consumption and
physical activity.
In Mexico, 60 percent of adolescents do not do any physical
activity and although it is a compulsory subject in schools,
it is not enough to compensate for their calorie intake. We
are developing strategies to promote physical activity. For
example, a new social media project will strengthen the
importance of physical activity alongside good nutritional
habits among adolescents. We are also working on
another initiative that advocates water consumption and
accessibility. Several bad nutritional habits can be traced to
the sugary drinks consumed by many children just because
their schools do not have potable water.
Besides diabetes and cardiovascular problems, there are
also many psychosocial effects associated with obesity.
The way obesity is perceived in Mexico can incite bullying,
which can also lead to children losing motivation, eating
more or suffering other nutritional diseases such as
anorexia or bulimia.
Q: How effective have measures such as the sugar tax or
the ban on salt-shakers on restaurants tables been?
A: The sugar tax has contributed to fighting obesity but
it is still low (about MX$1 or US$0.05). More investment is
needed to change children’s behavior and even more so
that of their parents. Working with children as agents of
change could be promising because they can inform their
parents and prevent them from buying food that is not
permitted in their schools. In Yucatan, for example, children
are only allowed to bring to school the foods that appear
in a healthy food chart, which has obliged parents to make
healthier choices.
Q: How can UNICEF fight dietary misinformation in Mexico?
A: There are several myths regarding breastfeeding. For
example, some women start feeding their child with
formula when they cannot pump milk because they believe
they have an issue. The truth is that they do not know how
to breastfeed.
Good nutrition starts in the womb so providing timely and
accurate information to pregnant and lactating mothers
is vital. Although one of UNICEF’s main priorities is the
prevention of teenage pregnancy, we also work to make
sure adolescent mothers get the right information to
provide their babies with the best nutrition and the best
beginning to life.
Q: What has changed regarding low breastfeeding rates
in Mexico and the impact on child obesity?
A: Tackling obesity is a priority for UNICEF and
breastfeeding is vital in combating obesity. Women are
getting more and more information about the positive
impacts of breastfeeding; however, awareness is only
slightly increasing and there is still much work to do.
UNICEF works closely with strategic partners such as
governments, academia, NGOs and the private sector
to support public health and advocacy campaigns. We
participate in high-profile events like breastfeeding day,
while also working locally with partners such as IMSS and
the Ministry of Health.
It is not only about encouraging breastfeeding per se,
it is also about making sure breastfeeding is a cross-
cutting and integrated element of other programs.
The main issue with breastfeeding lies not only in how
people perceive it, also in how people experience it. For
example, working mothers lack adequate breastfeeding
spaces in their workplaces and must leave their child at
home under a relative’s care. If a teenage mother does
not receive the right information on how to take good
CAMPAIGNS, BETTER HABITS NEEDED TO FIGHT CHILD OBESITYPRESSIA ARIFIN-CABODeputy Representative of UNICEF in Mexico
VIEW FROM THE TOP
UNICEF is the UN agency in charge of promoting children’s
rights and wellbeing. Its local agency works with the Mexican
government, NGOs and private companies to combat issues
that harm children’s quality of life
29
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volum que veria cullaut landae ipsaes magnis plaut eium.
Giamus as eatet rerate corporunt ut adior si inctatio.
practices and combating childhood overweight and obesity.
It is not just about working at the policy level but also at
the budget level. This is a worthwhile investment because
what is invested in early childhood will pay off in the next 20
years. Investing in combating overweight and obesity will
save the government MX$64 billion (US$3.5 billion) yearly,
the amount that public health spends on treating diseases
associated with overweight and obesity.
Q: How can you demonstrate to the government what
works and what does not?
A: We gather data and look at different ECD indicators
such as health and nutrition as well as government
spending. We place a monetary value on each investment
to know the rate at which prevention expenditure reduces
correction expenditure.
Q: What will be the main priorities for UNICEF in Mexico
in the next two years?
A: In 2019, we will embark on a new six-year country program
in which obesity will continue to be a main priority. We will
increase our efforts to keep doing research and gather
evidence to support health systems to prevent overweight
and obesity from an early age. UNICEF will also work with
adolescents to champion physical activity through innovation.
We will tailor interventions to reach children and provide
basic public services that will help combat overweight and
obesity, including access to safe and potable water. We have
been firefighting the symptoms and consequences but we
really need to work together on the causes.
care of her child, which has a lot to do with lack of sex
education in schools, then it is easier for her to believe
in myths. Nutritional education for adolescents is crucial,
particularly for adolescent girls because they might
become mothers one day. If these girls receive adequate
and timely information, they could influence whether the
next generation will be obese or not.
Q: What are UNICEF’s plans for indigenous communities
in terms of nutrition?
A: The main challenges associated with reaching
indigenous communities are poverty, remote locations,
lack of access to market choices and the media. Due to
poverty, they buy high-calorie food with low nutritional
value just to get through the day. In addition, we cannot
lose sight of the chronic malnutrition that today continues
to affect 1.5 million children, especially in rural and
indigenous communities. The rural health centers have
benefited from interventions via text messages with
information on topics like breastfeeding, Early Childhood
Development (ECD), water and sanitation in schools and
good nutritional practices.
Q: How can UNICEF make these programs sustainable?
A: UNICEF and other UN agencies work closely with national
and local governments and other partners to support their
efforts. Program sustainability is tied to the government’s
empowerment to launch and continue these programs, while
funding them with sufficient resources. In middle-income
countries, UNICEF’s work is focused on supporting the
government on upstream work. All of these initiatives are
pilots and part of the process to generate evidence to show
the success a program may have: the costs and the benefits.
For example, part of UNICEF’s work is to encourage
public investment in ECD, which includes good nutritional
“In Mexico, 60 percent of adolescents do not
do any physical activity”
30
AIR POLLUTION WORLD’S FOURTH-BIGGEST KILLER
obstructive pulmonary disease (COPD),
ischemic heart disease (IHD) and stroke and
lung cancers in adults. Other associated
health effects include adverse birth outcomes,
childhood respiratory disease, diabetes,
atherosclerosis and neurodevelopment and cognitive
function, according to the WHO. A study published in 2016
in the National Academy of Sciences examined patients in
the UK and Mexico and showed links between air pollution
and Alzheimer’s disease. The exact link between pollution
and allergies is yet to be established but the WAO forecasts
that as air pollution and the ambient temperature increases,
so will problems related to allergies.
The organization measures air pollution in PM10 and
PM2.5, which is particulate matter of less than 10 and 2.5
micrometers. The measures are an average taken between
2010 and 2015, unless the latest available data precedes
this. It recommends no more than an annual mean of 20µg/
m3 for PM10 and 10µg/m3 for PM2.5. With the annual mean
in Mexico varying between 11-35 PM2.5 µg/m3, it sits well
above the recommended guideline.
In addition, pollution plays a role in other diseases and
conditions, such as depression and cardiovascular health.
“Urbanization and depression go hand in hand. As an
economy develops, the population is weighed down with
heavier workloads, we spend more time in traffic and
produce more pollution, all of which are stress factors
that can lead to depression,” explains Oscar Parra,
Managing Director of Mexico, Central America and the
Andes of Lundbeck.
Pollution in Mexico has long been a known-issue and its
capital, Mexico City, was one of the first cities in the world
to implement measures such as the license-plate-based
restrictions Hoy No Circula (No-Drive Day) in 1989. The
restrictions have evolved over the years and now prohibit
drivers with cars that are not granted a 00 or 0 hologram
(linked to car age and MOT results) and registered to
Mexico City from driving on one of the weekdays. Since
2008, the measure has been extended to Saturdays.
Cars with a 1 hologram are forbidden to be used on
two Saturdays per month, and 2 holograms and cars
not registered to the megalopolis are prohibited every
Saturday. There is an additional contingency, initiated
when pollution in Mexico City reaches 150 IMECA points,
a measurement based on six types of pollutants. However,
despite the extra Saturday measure, a paper published
Ninety-two percent of the world’s population lives in areas
that do not meet World Health Organization (WHO) safety
guidelines, according to a WHO study from September
2016. Mexico City is one of the most polluted cities in the
world, and according to government data, saw only 78 days
of clean air in 2016 according to WHO guidelines.
“Today, climate change and pollution are realities,” says
José Narro, Mexico’s Minister of Health. “We have serious
problems in Mexico City but both local and federal
governments are taking action. We now have much better
ways of measuring pollution levels and better instruments
to measure the impact that polluting particles have.
Mexico City is in a valley and pollutants do not disperse.
Some actions taken include the restriction of vehicles and
industrial activity, which limit mobility. The Environmental
Commission of the Metropolis (CAMe) is a coordinating
mechanism that includes local, state and federal levels
of government. President Peña Nieto requested that the
commission include the Ministry of Health. We all have to
realize that we have to do things for our own health. There
are several dimensions to health, one of which is individual
and another is collective.”
Poor air quality accounted for one in nine deaths in
2012, according to the report. This translates to 3 million
deaths globally for 2012 related to outdoor air pollution
and 4.3 million related to indoor pollution. Of the total
deaths, 93,000 occurred in low-middle income countries
in the Americas. Around 87 percent of the deaths linked
to outdoor air pollution occurred in low-middle income
countries, where 82 percent of the world’s population
live. According to the World Allergy Organization (WAO),
common outdoor pollutants composed of particulate
matter include vehicular traffic and fuels such as coal and
gas for heating and industry. Indoor sources include wood
and coal used for heating and cooking and tobacco smoke.
Air pollution was responsible for 10 percent of deaths,
the fourth biggest killer behind metabolic risks, dietary
factors and tobacco smoke, according to a 2013 World
Bank infographic.
Causes of death linked to air pollution include acute
lower respiratory infections in children under five, chronic
ANALYSIS
Low-quality air covers many of the world’s biggest cities
and Mexico is no exception. This creates a variety of health
problems but initiatives are beginning to emerge to improve
or solve the problem
31
are posted across the city and throughout the media,
encouraging workers to cycle or take public transport and
urging bosses to allow employees to work from home.
In high-income countries, 56 percent of cities with over
100,000 inhabitants do not meet WHO air-quality
guidelines, nor do 98 percent in low-middle income
countries. This prevalence of pollution costs the global
economy dearly. The World Bank estimates premature
deaths due to air pollution to have cost US$225 billion in
2013 in forgone labor income, up from US$162 billion in
1990. “The respiratory health of children is at higher risk
since they inhale a higher volume of air per body weight
than adults and their immune defense mechanisms are
still developing,” says the WAO.
With pollution so deadly, many are creating alliances to help
clean up the air. The World Bank partners with the Climate
and Clean Air Coalition (CCAC) and the Global Alliance
on Health and Pollution and the WHO has established a
campaign with the CCAC and the government of Norway
called BreatheLife, which has identified a number of ways to
clear the air, including sustainable transportation, industrial
emissions reduction, solid-waste management, renewable
power and energy-efficient homes. For true change to occur
however, a push for clean air needs to come not only from
concerned NGOs but also from an involved population.
in Nature by Lucas Davis, Faculty Director of the Energy
Institute at Haas, finds it has had “virtually no discernable
effect on air quality.” The main reason attributed to this
is that the expected increase in public transportation did
not occur.
Still, the Global Alliance on Health and Pollution ranks
Mexico among the top 10 countries worldwide turning
the corner on toxic pollution in 2014, due to its efforts in
turning a contaminated oil refinery in Mexico City into an
urban park with over a million visitors per year. Two other
Latin American countries, Peru and Uruguay, were also
among the top 10.
On March 1, 2017, the Ministry of the Environment and
Natural Resources launched a new National Strategy of
Air Quality (ENCA). ENCA aims to “control, mitigate and
prevent the emission and concentration of pollutants in
the atmosphere in rural and urban areas by 2030” through
five main lines, 21 strategies and 69 lines of action. The
five main lines are: integral management to improve
air quality, efficient and result-focused institutions,
companies committed to air quality, atmospheric
policies based on scientific bases and a responsible
and participative society. Action in the responsible and
participative society line has already begun as photos
of children who cannot play outside due to dirty air
LOCATIONMEAN PM2.5 (µg/m3)
1 Monterrey 36
2 Toluca 33
3 Salamanca 28
4 Leon 27
5 Iraputo 26
6 Mexico City 20
7 Puebla 20
8 Guadalajara 19
Source: WHO
< 10
11 - 15
16 - 25
26 - 35
Annual mean ambient PM2.5 (µg/m3)
AIR POLLUTION OVER MEXICO
8 5
6
1
7 2
34
33
The greatest challenge of 2016/2017 for the healthcare system is granting access
to improved services to a larger percentage of the population. That task falls on
the shoulders of the related public institutions, such as the Mexican Social Security
Institute (IMSS) and the Seguro Popular. Less than half of the Mexican population
has access to public healthcare and facilities, with 62.5 percent of the national
workforce informally employed according to El Economista in an October 2016
report. INEGI figures show that only 62.2 million people, or about 48 percent of
the population, had access to IMSS services as of July 2016. Despite government
efforts, this figure represents only a 33.3 percent increase since 2006.
This chapter will offer an overview of the country’s healthcare systems both public
and private. Alongside the main social institutions and hospitals in Mexico, it will
feature interviews from regional health ministries and it will cover the system’s
advantages and flaws, as well as the obstacles to overcome. This section will also
review how the public and private sectors can work hand in hand to improve
access to healthcare, notably through public-private partnerships. Investment in
the Mexican healthcare system and its promotion abroad, including infrastructure
projects such as new, innovative health facilities, will also be in focus.
HEALTHCARE SYSTEMS
2
35
CHAPTER 2: HEALTHCARE SYSTEMS
36 ANALYSIS : Access to Healthcare: An Ongoing Mission
37 INFOGRAPHIC: Mexico's Healthcare System
38 VIEW FROM THE TOP: Armando Ahued, Ministry of Health
40 VIEW FROM THE TOP: Gabriel O’Shea, Seguro Popular
42 VIEW FROM THE TOP: Marco Navarrete-Prida, PEMEX
44 VIEW FROM THE TOP: José Reyes, ISSSTE
45 VIEW FROM THE TOP: Roberto Bonilla, Hospitales San Ángel Inn
46 ANALYSIS: Public-Private Collaborations Boost Sector
47 VIEW FROM THE TOP: Alejandro Alfonso, ABC Medical Center
48 VIEW FROM THE TOP: Misael Uribe, Médica Sur
49 VIEW FROM THE TOP: Juan Galindo, Christus Muguerza Sistema de Salud
50 INSIGHT: Rafael Espino, Amerimed
51 VIEW FROM THE TOP: Miguel Castillo, Hospital Sedna
52 INFOGRAPHIC: National Health System Under the Spotlight
54 INSIGHT: Francisco Villarreal, Swiss Hospital
55 INSIGHT: Ricardo Bojalil, AsMed
56 VIEW FROM THE TOP: Jaime Cervantes, Grupo Vitalmex
57 VIEW FROM THE TOP: Ángela Spatharou, McKinsey & Company
58 VIEW FROM THE TOP: Lucas Olmedo, Fligoo
36
ANALYSIS
ACCESS TO HEALTHCARE: AN ONGOING MISSION
announced during 2017,” says Julio Sánchez y
Tépoz, Commissioner of COFEPRIS.
According to the OECD, in 2015 privately
financed health expenditure represented 48.5
percent of total sector expenses in Mexico. In addition,
few have private insurance to fall back on. Analysts peg
the number at under 10 percent of the population. In
2016, Moses Dodo, General Manager of Bupa Global Latin
America, explained that corporate clients are driving the
medical insurance market in Mexico and many young start-
ups are targeting the corporate insurance market. Others
are spotting opportunities to create innovative business
models, targeting the middle class.
A final challenge is the demographic transition Mexico is
facing amid a declining fertility rate and as the population
ages. According to the OECD, the country’s fertility rate has
dropped from 5.9 children per woman in 1975 to 2.2 in 2015.
“Mexico’s population, like many around the world, is going
through a demographic transition,” says Mexico Minister of
Health José Narro. “Population pyramids have changed from
20 years ago, when there was a strong base of young people.
Now, the number of old people is increasing. Forty-five years
ago, the median age was 17.8. Now, it is 27, so we can say
that the population is maturing. Children and the elderly are
dependents and there are just over five million people aged
over 70, but that figure will increase to over 17 million in 2050
thanks in part to medical advances. Today, a regular infection
can be cured while chronic, nontransmissible, nonparasitic
infections can be controlled. Health is a process, not a state.
Health ranges from the complete state of physical and
mental wellbeing as defined by the WHO, to a second before
death, when health is basically lost. In between, there are
many states, some better than others. If people see health
this way, prevention can be put in place. We want to promote
education so that more people can take control of their
health. We must begin to build processes for healthy aging.”
Although the system faces a great deal of challenges,
globally it does not fare so badly and has been mentioned
as a model that, with some tweaks, could inspire others.
The Bloomberg Healthcare Efficiency Index 2016 places
Mexico 17th out of 55 countries, weighing up factors such
as life expectancy (60 percent of the grade) and relative
and absolute health expenditure (30 percent and 10 percent
respectively). Mexico’s life expectancy has increased in
recent years despite high levels of obesity and diabetes,
which certainly boosted its ranking.
Less than half of the Mexican population has access to
IMSS, the largest public healthcare institution, and its
facilities, with 62.5 percent of the national workforce
informally employed, according to an El Economista report
published in October 2016. INEGI figures show that only
62.2 million people, about 48 percent of the national
population, had access to IMSS services as of July 2016.
Despite government efforts, this figure represents a 33.3
percent increase since 2006.
Institutions have made an effort to stretch budgets and
cover more people. The Seguro Popular, for instance,
has started eliminating duplicate registrations with other
institutions. “We have cleaned up our database and no
longer have 9 million duplicate registrations. We will
continue to work on this in 2017 and we expect to reflect
this in a higher quality service for patients because there
will be more resources per policyholder. The Seguro
Popular has been sharing information with the other
health systems since 2016, a year in which we lowered
the number of policyholders by 3 million,” says Gabriel
O’Shea, National Commissioner for Social Protection in
Health of the Seguro Popular.
However, the Mexican population pays a significant amount
of their healthcare expenditure out-of-pocket, even in
proportion to other countries. According to OECD figures,
only 5.8 percent of GDP in 2015 in Mexico was spent on
healthcare, almost half of which was out-of-pocket. Canada,
for example, spent 10.1 percent of GDP on healthcare in
2015, only 30 percent of which was out-of-pocket. In a
country with a minimum wage of MX$80.04 (US$4.4) per
day, paying for medical treatment out-of-pocket is simply
unaffordable for many. In addition, when medicine is out of
stock in the public sector, it forces workers that should be
covered to fork over money for their treatments. To make
medicine more affordable, COFEPRIS has been encouraging
the production of generics by liberating patents. “In total,
37 active substances have been liberated in our generics
strategy, forming 491 generics. This represents MX$25
billion (US$1.4 billion) in savings and 2 million extra people
can be treated thanks to these savings. In 2017, we will
continue with this strategy and in that of innovative
medicine. Over 40 new molecule authorizations will be
The Mexican healthcare system is fragmented, although
the government is striving to improve access, its foremost
challenge. That task falls mostly on the shoulders of public
institutions, such as the IMSS and the Seguro Popular
37
MEXICO'S HEALTHCARE SYSTEM
For those who belong to the military
For those who belong to the navy
For everyone who is formally employed and is not covered by another public institution
INSTITUTIONS OF HEALTH AND SOCIAL SECURITY
Institutions of state governments,
for those who belong to the state in question
For state workers
For those who work at the oil
and gas company
Others, such as police medical services
PUBLIC HEALTH INSTITUTIONS OTHER TYPES OF INSTITUTIONS AND
PROGRAMS IN PUBLIC HEALTH OR SOCIAL SECURITY
Seguro Popular A type of public insurance for Mexican
residents not covered through another institution
The Ministry of Health
IMSS-Prospera For those who do not have social security and live in rural or marginalized urban zones in extreme poverty
SNDIF National System for the Integral Development of Families. Social assistance for Mexican families providing family planning, childcare and fighting drug absuse
Others Such as university medical services
PRIVATE INSTITUTIONS
Private health institutions that offer subrogated services public sector workers
Private health institutions open to the general public
Medical units that belong to a charitable organization and offer services to general public,
such as the Red Cross
Others, such as private doctor’s consultancies in pharmacies
INSURERS, BANKS & OTHER
INSTITUTIONS OF PREPAID MEDICAL
SERVICES
Insurers that offer medical protection services
Banks that offer health services to their employees
Other prepaid services such as NGOs or not-for-profit organizations
INFOGRAPHIC
Source: INEGI
38
Q: Why has health education not been integrated into
school curriculums?
A: It is a political decision that has not been made. What
could be more important than children learning how their
body works, the risks they face and what needs to be done
to preserve their health and life? This needs to be done
today, but it may take years. Still, the seeds need to be sown
or in years to come we will continue to face the same issues.
Our children can lose 10 years of life due to overweight and
obesity. At home, children are given portions to eat that are
the same size as those the parents eat. We need to change
the consciousness of parents. We also need to seek help
from teachers.
When I was studying medicine, I was taught to cure sick
people, not to keep people healthy. This is good but doctors
should also know how to look after people and point them
in the right direction to staying healthy. The healthcare
system cannot handle the number of sick people who
did not look after themselves and did not go for regular
checkups. In addition, care becomes extremely expensive.
Stents cost MX$25,000 (US$1,389) and some people may
require three or four. Dialysis costs MX$2,000 (US$111) per
session and sufferers may need three sessions per week
for the rest of their life. There is no wallet or public budget
that can withstand this.
Q: How has the Ministry of Health promoted a preventive
health culture and what is its view on vaccinations?
A: In the swine flu pandemic that took place in Mexico City
in 2009 I had to make a historic decision: to close the city
to protect residents. This taught us that we were vulnerable.
When the vaccine arrived, there was much confusion and
fear of the vaccine because the Minister of Health of
another state had commented that it caused Guillain-Barré
Syndrome. We refuted this, but the fear was terrible. Even
health personnel did not want to get vaccinated.
To set an example and prove the vaccine was safe, I was the
first to be vaccinated. Thankfully, former Minister of Health
José Ángel Córdova negotiated with Sanofi and distributed
stocks of the vaccine to all the states of the country. One
Q: What steps is the Ministry of Health taking to quash
disinformation and spread knowledge on health issues?
A: Mexico City has spearheaded the promotion of health
information. We have launched campaigns on every topic
imaginable and we have also printed 1.4 million copies of
a book on health for distribution to children in elementary
schools. It covers such topics as dental health, nutrition and
general hygiene. We have a second book on sexual health
with over a million copies in print. It touches on all related
topics. A third book covers addictions: alcohol, tobacco,
drugs, myths and truths.
We must incorporate health as a subject in schools. I am
convinced that the only way to make people co-responsible
for looking after their health is to empower them through
knowledge and understanding. If the information is
provided to children, they will have it when they in turn
become parents. For example, children do not brush their
teeth properly because their parents cannot show them
how. This is why nine out of 10 children in primary school
have cavities and in secondary school they all have cavities.
On average, adults loose seven to nine teeth after the
age of 60; they cannot chew or bite, they begin to have
gastrointestinal problems and become malnourished, so
they get osteoporosis and they fall and break a bone. This
is why it is so important to teach dental hygiene and the
same goes for sexual health.
HEALTH CHALLENGES IN ONE OF THE WORLD’S BIGGEST CITIESARMANDO AHUEDMinister of Health of Mexico City
VIEW FROM THE TOP
Armando Ahued is a surgeon from the UAM. He became
the capital’s Minister of Health in 2007 and is known for
successful programs such as Médico en tu Casa (Doctor in
your House)
In winter of 2016-2017, Mexico City saw 23.6 percent fewer
cases of pneumonia and bronchopneumonia
than in 2015/2016
39
of protection. The best time to get vaccinated is in
September or October. The aim of the Ministry of Health
was to vaccinate 2,447,344 people in Mexico City,
1,003,426 of which belong to my ministry. Mexico City
met 98.8 percent of that goal.
In addition to influenza, we have vaccinated against
rotavirus and pneumococcus. Everyone in a risk group
should get vaccinated including pregnant women, children,
elderly, diabetes sufferers and those who suffer from
chronic respiratory illnesses.
Q: What will the Ministry’s priorities be in 2017? How will
it distribute resources to achieve them?
A: The greatest priorities will be to consolidate the
infrastructure that we already have, to improve the
equipment, to prepare and train our professionals and
to launch a campaign on dignified treatment. In addition,
we will continue to promote health and prevention and
early diagnosis. Without a doubt, the Médico en tu Casa
(Doctor in your House) program, which has sent doctors
and nurses to knock on doors to seek out sick people, has
been a successful experience and we will consolidate the
strategy by making free health services a reality.
day, he called me and told me that, despite the Ministry
of Health’s investment, people refused to be vaccinated.
He asked me to find a way to get it done. I had the idea
to place the vaccination stands in the city’s metro, which
sees foot traffic of around five and a half million people
per day. We put stands in the biggest stations and offered
free vaccinations. As a result, people were lining up. I took
Minister Córdova to visit the stands along with the press and
word got out that the people of Mexico City were getting
the vaccination. This created a domino effect. Vaccination
stands were placed in public areas throughout the country.
This was the start of a culture of care and prevention.
From 2009 to the present, we have been vaccinating
without a problem. In winter of 2016-2017, Mexico
City saw 23.6 percent fewer cases of pneumonia and
bronchopneumonia than in 2015/2016, the number of
acute respiratory infections remained stable while there
were 56.6 percent fewer cases of influenza. There were only
10 deaths this winter, compared with eight last winter in a
city of millions of people. The virus we expected to be most
prevalent was H3N2 but it was actually H1N1.
From 2016, two oseltamivir generics have been available
but people continue to associate the active ingredient
oseltmavir with the brand Tamiflu and refuse to buy generic
versions. Now, we have enough oseltamivir in stock to
cover both this winter and the next. One issue is that when
a family member gets influenza, everyone in the family
takes some of the medicine as if it were preventive, which it
is not. There is also the issue of rapid testing, which results
in false positives or false negatives 50 percent of the time.
My recommendation is to seek out a clinical diagnosis only.
In addition, it is pointless getting vaccinated in February
or March, as the influenza season ends in March and
the vaccine takes 45 days to reach the maximum level
people ho haven been vaccinated
Vaccinations in cdmx
VaccinationsINFLUENZA VACCINATIONS IN WINTER 2016-2017
2,447,344is the Mexico City vaccination goal
� 98.8% vaccinations acheived
� 1.2% vaccinations not completed
Source: Mexico City Ministry of Health
40
Siglo XXI, which is aimed at children. To face these cuts,
we have lowered duplicate registrations and we have
cut some programs. We have also reduced trips to other
states to check on how things are going and employees
no longer have company cellphones. A program I
would have liked to implement but have not been able
to is the milk bank in hospitals to encourage exclusive
breastfeeding for the first six months.
Q: Of all the Seguro Popular’s programs, which is your
favorite?
A: My favorite program is probably the cataract one
because I am an ophthalmologist. However, the program
that has had the most impact is that which cares for
children with cancer. In 15 years we have managed to
reduce by 11 points the out-of-pocket expenditure of
Mexicans, although we still remain the country in the OECD
with the highest rate of out-of-pocket expenditure. I am
certain that with the modifications to the law we have
made we will achieve a reduction of 15 points within the
next few years. We expect that from 2017 onwards this will
help state health services carry larger stocks of medicine,
which is what is most hitting the wallets of Mexicans.
Q: The Seguro Popular now has bariatric surgery among
its services. What has been the result of that?
A: This is happening in Mexico City mostly, but it is hard to
implement in other states because there may not be as many
bariatric surgeons. It is aimed at cases of obesity in which the
patient is incapacitated in his or her daily activities. I believe
everything should be tried before resorting to surgery:
dieting and exercise or even taking medicine. Unless we
Mexicans change our diet and exercise, it will be difficult to
justify resorting to bariatric surgery because we have done
nothing to try and fight the root cause. It is all well and good
for the public sector to instill healthy habits in schools, but
what good is it if parents undo this work once the child gets
home? This is a complex theme that requires engagement
from all sides: municipalities and mayors, but the largest
commitment is that of parents. We have made great strides
through the Prospera program in teaching people to eat well,
which does not cost a lot of money.
Q: The Seguro Popular registered over 8,000 migrants
returning to Mexico in early 2017. How is it reaching
these people?
A: This has become quite a theme since President Trump
announced he would repatriate 3 million Mexicans. We have
created 50 booths in the 50 consulates in the US managed by
the Ministry of Health from where we distribute information
to our citizens about what the Seguro Popular is. We tell
them that it is free, what it covers and what it does not, so
that when they return to Mexico they can sign up. In addition,
we placed 24 sign-up centers in the five Mexican border
states solely aimed at reaching those being repatriated.
However, we have not seen an increase in deportations and
the number of people registered in the first three months of
2017 was the same as the first three months of 2016.
Q: The Seguro Popular expects millions of people to renew
their policies this year. How do you cope with such volume?
A: As of March 2017, there were 54.9 million Mexicans
affiliated with the Seguro Popular. The policies of 17 million
Mexicans will expire in 2017, although there is a tendency
to leave things to the last minute, and so on the last day
we see huge queues of people. Therefore, we expect only
50 percent of those 17 million to re-affiliate. We had 57
million policyholders last time we spoke with Mexico Health
Review in 2016. We have since cleaned up our database and
no longer have 9 million duplicate registrations. The Seguro
Popular has been sharing information with the other health
systems since 2016, a year in which we lowered the number
of policyholders by three million.
Q: How have public-sector budget cuts impacted the
Seguro Popular? How is it ensuring patients are not
negatively affected?
A: The Seguro Popular has suffered from budget cuts
to programs such as catastrophic expenses or Médico
CARING FOR HALF OF MEXICANSGABRIEL O’SHEANational Commissioner for Social Protection in Health of the Seguro Popular
VIEW FROM THE TOP
The Seguro Popular is a public-sector institution of health
and social security that operates through medical facilities
belonging to the Ministry of Health. It covers almost half the
Mexican population
41
a healthcare system and we see this increase every day.
There are 12 million diabetics in Mexico, of which only 38
percent have their condition under control. The others
are suffering from side-effects.
We have seen a decrease in the costs of cancer patients
due to generic medicine. Today, a patient with breast
cancer costs less than three years ago and we have seen
the same effect with HIV patients. The Seguro Popular
monitors 81,000 HIV patients, each costing MX$37,600
(US$2,089) per year. This is a great burden for healthcare
systems because they now live longer. HIV is not a death
sentence as it was in the 1980s.
Q: How will the Seguro Popular continue to face the
diabetes and obesity epidemic in 2017?
A: It is no longer about building large hospitals. We have
to continue what we have started: the interchange of
services. The theme of universality we all dreamed of is
surely not so. It has steps, each of which can take years.
We began interchanging during this six-year presidential
term, meaning patients can be treated where there is
room, even if the facilities belong to another health
system. We need to make the most of infrastructure that
is already in place. There are 35 private medical providers
that offer services to the Seguro Popular. We need to
increase this number and we should reach 50 by the end
of the year.
Q: You are an ophthalmologist. What trends in Mexican
ocular health are most concerning?
A: Cataract is the first reversible cause of eyesight loss in
the world and in Mexico the first cause of non-reversible
sight loss is glaucoma. The main problems I see when
giving consultations and operating are diabetes and
obesity. They are our nightmare. If I could, I would focus
resources on fighting these two conditions, which would
have a huge ripple effect on other health costs.
In consolidated purchasing, we have saved MX$11 billion
(US$611 million) over the past three years. We want health
centers to be on the lookout for these things and be
testing for them. In addition, it angers me if centers are
lacking tests because I send the states money to buy test
strips for them. Now, instead of sending money, I buy
material and send that to them. The same thing happens
with condoms. Twenty percent of pregnancies in Mexico
are in girls under the age of 19, so now we buy condoms
directly and ship them to the states.
Q: In which areas has the Seguro Popular seen the
largest increase and decrease in costs in 2016?
A: The largest increase has been in NCDs, mostly cardio-
pathologies and diabetes mellitus, and treatment of
ensuing complications like hemodialysis, amputations,
laser surgery for diabetic retinopathy and implanting
an Ahmed valve. All of this is extremely expensive for
Emergency ventilator Oxylog 300 plus and patient relocation with the Infinity M540 monitor
Oxylog 300 plus
42
we have many elderly patients; 56 percent of PEMEX’s
beneficiaries are over 65 years old.
Q: What challenges does PEMEX face in retaining workers
when faced with many new market entrants?
A: We need to offer the best benefits to our workers so
they do not need to look for other employers. This year, we
are also negotiating our collective bargaining agreement.
We work closely with the union and it is committed to
our focus on prevention and health promotion. We want
both employer and employee to take responsibility for
employee health. The paternalistic scheme in which
the state or PEMEX provides everything to a passive
beneficiary does not work. There should be a commitment
from the employees, too. To this end, we have integrated
a health bonus, which is given to workers with a BMI of
less than 25 or for those who lose 10 kilos in a year. Their
cholesterol and lipoproteins also must be in normal ranges
and if they are already diabetic their glycohemoglobin
must be under seven. If they comply they get the bonus.
Q: What relationship do you have with other public
healthcare institutions?
A: President Peña Nieto and Minister Narro are working
on the universalization of health services, which means
that each institution has to be open to providing and
receiving support from other institutions. We have an
agreement with all the National Institutes of Health and
we hire subrogated services in some other locations.
We have partnerships with health institutions in Sonora,
Aguascalientes, Tamaulipas and Veracruz. In cases of
industrial emergencies, we receive a lot of support from
IMSS. In 2016, when there was an emergency at our plant
at Pajaritos, Veracruz, we received patients from IMSS
because we had the largest coverage in the area. We also
share successful experiences among institutions. In fact,
every year we do a course on treating burn patients and
we invite professionals from IMSS, SEDENA and SEMAR to
take part because we are all part of the same ecosystem.
We also have an agreement with the Ministry of Health to
fumigate work areas to prevent vector-borne diseases and
we provide them with fuel for their trucks.
Q: What are PEMEX’s health priorities for its
beneficiaries in 2017?
A: As a healthcare provider, we have to focus on
simultaneous targets. However, we began as a medical
services company, so labor health is our main concern. We
have doctors at every work site to deliver preventive care
and promote health, hygiene, risk detection and to evaluate
the compatibility of employees with the jobs they do. For
example, some employees work 35-60 meters above a
platform or land. They cannot suffer from vertigo, have
the flu or a high BMI because that would be risking their
life. At PEMEX Health Services we are further ahead in
health services than other industries such as automotive,
pharmaceutical and aerospace. Our priority is to have our
workers operating under the best conditions possible.
Instead of building more hospitals, we want to focus our
efforts on promoting preventive care. In fact, PEMEX has
41 health centers, including 10 first-class clinics, 24 hospitals
and 168 preventive centers of labor health. Our hospitals are
operating on average at 70 percent capacity.
Q: What are the main health concerns of PEMEX’s
beneficiaries?
A: They are similar to Mexico’s main health issues: diabetes,
cardiovascular diseases, obesity and systemic arterial
disease. Our rates of diseases are low and the most
common are usually hearing problems. We are a high-risk
company, but we experience less than 0.2 accidents per
million hours worked. There are many myths about PEMEX
but we have one of the lowest sick leave rates among
companies. Our workers take less than four sick days per
year thanks to our preventive initiatives, our efficiency in
setting appointments and the workers own commitment.
The life expectancy of petroleum workers is 80 years,
higher than Mexico’s average, which is 78. This is because
they have increased access to health services. Therefore,
SIMULTANEOUS TARGETS, POSITIVE RESULTSMARCO NAVARRETE-PRIDADeputy Director of Health Services for PEMEX
VIEW FROM THE TOP
Petroleros Méxicanos (PEMEX) is a state-created oil and gas
company and is the largest company in Mexico. It runs its own
healthcare system for its workers, which is also one of the
largest in the country
43
of Health’s priorities on prevention of vector-borne
diseases and teenage pregnancy. In addition, we have
vaccinated almost 100 percent of 1-year olds. During
pregnancy, we perform syphilis and HIV screenings as
well as promoting contraceptive methods. We are also
conducting an analysis of patients with hepatitis C to
offer them new treatments.
Q: What are the benefits of digitalizing patient
information?
A: We hold universal electronic records for direct and
subrogated systems. The software was created by PEMEX
10 years ago for direct services and won the Innova award.
Three years ago, we integrated it to the subrogated health
services. When a doctor receives a patient, he has a
password to access the patient’s data. The software is also
linked to the labor health department and to a diabetes
website on which doctors can create an alert when they
recognize a diabetic patient. All this clinical information
and laboratory data is also gathered to elaborate Big
Data, which can be analyzed and presented in graphics
to identify which patients, in which areas and in which
positions have which diseases and find correlations.
Q: What is PEMEX’s contribution to Mexico’s growing
clinical research industry?
A: We perform clinical trials to see which type of drugs
and medical devices are best. In fact, two years ago we
launched our molecular biology laboratory at the Hospital
Central Sur de Alta Especialidad in Mexico City, where
we are carrying out bacterial studies and soon will start
a genetic study of the PEMEX population. We have an
agreement with INMEGEN to know which diseases our
beneficiaries are prone to and to identify the best drugs to
treat them. In addition, we have a medical journal in which
PEMEX health professionals publish articles and research
papers. It is all part of our effort in preventive medicine.
Q: How did you manage the delegation of part of your
services to a private insurance company?
A: There are smaller locations in which we have fewer than
120 workers but we are still obligated to provide health
services. It would be very expensive for us to build a PEMEX
hospital in those locations. From the beginning, we have
hired private services to support those PEMEX locations
that lack a health facility but which have active workers,
or a total 104,000 beneficiaries. Two years ago, PEMEX’s
supply department designed a strategy to have one health
administrator instead of 95 providers. Unfortunately, the
results were disappointing and we are now in the process
of returning to our previous system.
Q: What opportunities do you offer students who want
to do medical residencies in PEMEX hospitals? Which
specialties are available to them?
A: Through PEMEX Health Services’s resident
program we have trained high-quality and specialized
professionals. We have schools at Hospital Central
Sur de Alta Especialidad and Hospital Central Norte in
Azcapotzalco, Mexico City; Hospital Regional Ciudad
Madero, Tamaulipas and Hospital Regional de Salamanca,
Guanajuato. There are 18 specialty and five subspecialty
programs available for 388 students in the country. We
are focused on the specialties we treat the most and for
10 years we have integrated successful students into the
positions we need to fill.
Q: What are PEMEX’s main current health campaigns?
A: We have permanent programs to promote health,
focused on child obesity, cervical and breast cancer
for women and prenatal care. We also perform chronic
degenerative diseases screenings, even in the workplace.
We run a constant campaign on HIV and we treat around
700 cases, some of whom are active workers not on sick
leave. We also run campaigns aligned with the Ministry
44
is to triple the number of mammographies from between
110,000 and 115,000 to 350,000. ISSSTE is raising awareness
among women between 25 and 69 years old. Although we
have reduced the prevalence of cervicouterine cancer and
the related mortality rate, the same cannot be said for breast
cancer. We named February Men’s Health Month because
men are less likely to visit a physician than women: 63
percent of first-time doctor’s appointments are women.
Q: On the business side, what are the advantages of
building hospitals through PPP schemes?
A: ISSSTE has an infrastructure program and fiscal resources
but, due to budget adjustments, we have had to vary our
financing to continue building and expanding hospitals and
clinics. We needed to migrate to a new scheme involving the
private sector. ISSSTE invested over MX$4 billion (US$222
million) last year in building and expanding a number of clinics
and hospitals. We have analyzed several new hospital projects
in Tampico, Acapulco, Oaxaca and Mexico City and there are
also some requests for new hospitals in San Luis Potosi and
Sonora. There is a PPP hospital being built in Merida and three
others to be tendered: Mexico City-Tlahuac, Villahermosa
and Tepic. We estimate that in this federal government
administration’s remaining time, investments from PPP
schemes could total about MX$14 billion (US$777 million).
Q: What criteria helps ISSSTE to decide where a new
hospital or clinic will be built?
A: The location of beneficiaries and public health
infrastructure are the key criteria. The Ministry of Health,
ISSSTE and IMSS have developed a strategy that prevents
duplication, so if there is an IMSS hospital in a community
with an ISSSTE clinic and someone at the latter needs
surgery, hemodynamics or cardiovascular services, these
will be subrogated to the IMSS hospital. Services will also
be subrogated from IMSS to ISSSTE, which does not mean
implementing a universalization program but exchanging
services and prioritizing cities and states according to
the demand for health services and the existing public
infrastructure. All public-sector agencies need to maintain
a close relationship. We also have collaboration and service-
exchange schemes between both public and private entities.
Q: In addition to health services, ISSSTE works on
prevention through public awareness campaigns. Which
areas are key targets?
A: We have a number of ongoing campaigns. One such
campaign relates to addiction prevention, particularly
smoking, and targets young people through courses,
conferences, personnel training, graphic information and
social media. We are also drafting several campaigns against
overweight and obesity and their related conditions, which
have a profound effect on quality of life and on the federal
budget. Twenty percent of ISSSTE’s health-allocated funds
were used to raise awareness of diabetes, overweight and
obesity, hypertension and cervicouterine, breast, prostate
and colon cancer. ISSSTE’s annual budget amounts to MX$45
billion (US$2.5 billion) and we are spending MX$10 billion
(US$555 million) or more just on these diseases.
Among specific programs, the Salud en tu Escuela (Health in
your School) campaign is focused on young people and on
the children of beneficiaries who suffer from overweight and
obesity. This is a joint effort between players in the public
health and educational spheres, such as the Ministry of
Public Education (SEP) and the National Education Workers’
Union (SNTE). Integrating teachers as health promoters and
developing permanent awareness and physical exercise
campaigns are key objectives that will enable ISSSTE to
evaluate the results at each school in the program. The
effort will include physicians, nurses and some students
from ISSSTE’s School of Nutrition and Dietetics. The ISSSTE
en tu Dependencia (ISSSTE in your District) program is
focused on monitoring the health of employees. ISSSTE has
identified about 570,000 diabetics among its beneficiaries.
Another campaign targets breast cancer across public health
institutions. We integrated 25 new mammography machines
into our facilities and we are finishing a new diagnosis center
in one of our hospitals. Between 2016 and 2018, ISSSTE’s goal
CAMPAIGNING FOR BETTER HEALTHJOSÉ REYESDirector General of ISSSTE
VIEW FROM THE TOP
The Institute of Safety and Social Services for State Workers
(ISSSTE) is the second largest of Mexico's public health
institutions, providing health and social services to almost 13
million government workers
45
with a new business model backed up by other hospitals
if complex treatments are needed. We opened this clinic
because our customers asked us for a location where minor
surgery could be performed.
Q: What are the main challenges and concerns for San
Ángel Inn?
A: Our main concern for the next four or five years is the
patient’s access to healthcare, which mutual health insurance
coverage could solve. In Mexico, people have access to diverse
health services through IMSS, ISSSTE, PEMEX and other public
entities, while private coverage is scarce, with only about 7
percent of the population under such plans. This percentage
has not grown in the last 10 years despite an expanding middle
class. Moreover, our main institutional clients are changing.
Banks do not want to continue using reverse quota schemes
and prefer to pay for social security while some insurance
companies are considering dropping high medical-expense
insurance on which they lose money. We need to learn to
collaborate with other industry players to improve access to
health. Our main challenge is in understanding how to increase
access to private and public medical insurance.
Q: What impact do you expect to see from the model of
chronic disease insurance?
A: It could improve the access to health services. Diabetes,
cardiovascular diseases and cancer are the main causes of
death in Mexico. A person who has corresponding coverage
has a 30 percent chance of access to a good hospital in case
something serious happens. San Ángel Inn is creating a product
specifically for cardio-metabolic and cardiovascular disease.
This low-cost premium scheme is far more accessible. However,
there is no insurance or prevention culture in Mexico. Hospitals
do not focus their marketing on creating awareness about the
need for health coverage because the existing demand for
their services is enough for most to perform relatively well.
Q: What makes San Ángel Inn different from its
competitors?
A: Our management model, which allows us to provide
patients with less costly services while delivering a long-
term return on investment. We offer good infrastructure
with quality care at substantially lower prices than our
competitors. That is why we are the preferred hospital for
closed-network patients and companies that manage their
own healthcare benefits. Other hospitals target individual
patients while we want to attract businesses that will direct
their employees to our hospitals.
Q: How does the hospital group keep up-to-date with
technological advancements?
A: San Ángel Inn makes an effort to be up-to-date but our
strategy does not require having the latest technologies. We
make sure we have the modern and functional technology
to resolve 97 percent of the cases we encounter, so having
state-of-the-art technology does not make sense with our
business model. The only treatments we cannot perform
because of technological limitations are radiotherapy, PET/
CT and some oncological treatments. We have a capable
medical team, enough technology and good infrastructure.
Q: What challenges do you encounter when hiring and
retaining nursing staff?
A: The issue is not in retention but in recruitment. The nurses
working at San Ángel Inn must have at least an undergraduate
degree. Our competition regarding human talent are not
private hospitals but public, because nurses in the public
sector work only five days a week and receive better benefits
than we can offer. We attempt to create a pleasant, patient-
oriented work atmosphere where nurses can grow. Within this
model, a nurse’s satisfaction does not derive from the benefits
the hospital provides but from gratified patients. When a
patient has a good experience, the whole team is pleased.
Q: What plans does San Ángel Inn have to expand?
A: We will finish consolidating our presence in Mexico City.
We have a new hospital in Patriotismo and we are about
to open a new short-stay and ambulatory clinic in Mier y
Pesado. This project is an opportunity to enter a new niche
GOOD INFRASTRUCTURE, QUALITY CARE, LOWER PRICES
ROBERTO BONILLADirector General of Hospitales San Ángel Inn
Hospitales San Ángel Inn is a hospital chain with four
installations in Mexico City. It offers a wide variety of
treatments and specialties, specializing in gynecology and
obstetrics and cardiology and hemodynamics
VIEW FROM THE TOP
46
PUBLIC-PRIVATE COLLABORATIONS BOOST SECTOR
The public sector has made great advances in recent years
in dealing with the country’s large volume of patients
and in improving quality of care, but there is still room
to improve. According to the OECD, 5.3 percent of the
Mexican population spent at least one night in hospital in
2014, equivalent to around 6.4 million people. In addition,
it reports that in the same year, an average of 2.6 doctor
consultations were carried out per capita, equaling 312
million visits. Outsourcing services, used in the right way, may
benefit both institutions and patients, hospital operators say.
Seguro Popular, one of the country’s main social security
institutions, does not own any hospitals itself. It outsources to
public and private hospitals the services needed by its insured
patients. The agency has a catalogue of required services that
private hospitals can address according to their capabilities
and for which they can seek accreditation. Once a hospital is
certified, Seguro Popular can begin referring patients.
“[The relationship] is important because of the volume of
patients the government brings but also as a contribution
to balancing the health offering in different segments of
the population,” says Miguel Castillo, Director General of
Hospital Sedna, which offers oncology services to Seguro
Popular to treat breast, colon and prostate cancer. Due to
the high incidence of those cancers in Mexico, these services
are in high demand. According to the WHO, in 2014 there
were 20,444 cases of breast cancer, 14,016 cases of prostate
cancer and 8,651 cases of colorectal cancer in Mexico. The
relationship with Seguro Popular is so fruitful that the
hospital hopes to expand the number of services it offers to
the government, looking to add general surgery and high-
risk pregnancies to its list. Castillo hopes that these further
accreditations will increase the number of patients seeking
treatment at the hospital.
Despite the many benefits for the health system, there are
still some kinks to be worked out. “Our relationship (with
the Seguro Popular) is strong but there are certain rules
that keep us from offering it more products and services,”
says Alejandro Alfonso, CEO of ABC Medical Center.
“For every MX$1 it pays us, we have to give MX$0.19 to
the government. Seguro Popular does not pay VAT but
as a private hospital we are not exempt. Another issue
is the difficulty of selling services to Seguro
Popular. Hospitals have to undergo several
time-consuming registration processes so the
patient stream is initially slow.”
Alfonso additionally explains that unlike IMSS patients,
Seguro Popular patients can expect treatment in any
participating hospital, which results in many patients
traveling in from city outskirts or from more rural or less
developed states to the big cities. “Seguro Popular was
created with the theory that ‘money will follow the patient,’
so the belief is that wherever he or she goes there is a budget
to pay for the service. The actual situation is that the federal
government gives each entity a budget targeted as money
for Seguro Popular, but a given entity may not necessarily be
equipped with the services specific patients need. Therefore,
there is a large migration of patients to Mexico City, where
large hospitals, specialized clinics and good services can
be found. When those patients arrive at hospitals in the
city, the center’s administrator must find a way of covering
each patient’s costs because the state to which the patient
belongs will not pay,” he says.
IMSS does have hospital infrastructure but it is often
overwhelmed with demand because it is responsible for
the health of over 70 million Mexicans. In this case, the
construction of hospitals and clinics in conjunction with the
private sector may be a better option.
“What IMSS has done is take advantage of new legislation
to facilitate the construction of new infrastructure, clearly
without medical care being in the hands of the private sector
at any point, which is a legal impossibility,” says Mikel Arriola,
Director General of IMSS. “We are having facilities built at
a faster pace, more efficiently and without the hurdles
associated with direct public investment. We have had
bidding processes for four hospitals. We are looking to be
more efficient. We want to build more hospitals with less
money. We have MX$20 billion (US$1.1 billion) to build 12
hospitals and four of those will be through PPPs.”
The relationship between public and private entities will
continue and even expand for the foreseeable future.
Obesity, for example, is one treatment area that will benefit
from the relationship. The OECD reports that more than one
in three people in Mexico are obese. To help alleviate the
issue, in 2016, Seguro Popular announced that due to the
high obesity rates bariatric surgery would be offered through
the public sector.
ANALYSIS
The Mexican healthcare system is fragmented and many industry
experts believe that increased collaboration between the public
and private sector and within the industry could increase cost-
efficiency and lower waiting times at busy institutions
47
every MX$1 it pays us, we have to give MX$0.19 to the
government. Seguro Popular does not pay VAT but as a
private hospital we are not exempt.
Another issue is the difficulty of selling services to
Seguro Popular. Hospitals have to undergo several time-
consuming registration processes so the patient stream is
initially slow. Seguro Popular was created with the theory
that “money will follow the patient,” so everywhere he or
she goes there will be a budget to pay for the service. The
actual situation is that the federal government gives each
entity a budget targeted as money for Seguro Popular
but a given entity may not necessarily be equipped with
the services specific patients need. Therefore, there is a
large migration of patients to Mexico City, where large
hospitals, specialized clinics and good service can be
found. When those patients arrive at the hospitals in the
city, the center’s administrator must find a way of covering
patient costs because the state to which the patient
belongs will not pay.
The truth is that money does not follow the patient
because security systems for patient care in Mexico are
sectored. With IMSS coverage, a patient can only go to
IMSS facilities. Mexico operates a vertical system, so there
are many patients for whom there is no budget. We see
teenagers with high-risk pregnancies camping outside
hospitals, waiting for care without a place to sleep, and
most of these are helped by civil organizations.
Q: What approach could help solve the health system’s
current situation?
A: The solution is not easy and is not short term. First, we
have to discuss which healthcare model we want to follow
with the participation of many social agents. Once the
model is established, we can decide our course of action.
Q: How is ABC Medical Center cooperating with the
public sector?
A: The healthcare situation in Mexico demands private
hospitals work together with the government because it is not
economically viable for the government to meet healthcare
service demands by itself. The key is to find the right way
to make this happen to avoid the perverse incentives in the
private and public sectors that pollute association. ABC
Medical Center has been working with public healthcare
through Seguro Popular and by offering occasional services to
other government institutions. As a not-for-profit organization,
we can afford to treat patients below cost and this is important
because helping those who do not have enough resources is
a part of our founder’s legacy. The challenge is to determine
the price the government can pay for these services and how
economically and clinically efficient we can be as a private
hospital when providing this aid. If there are no clear rules
about quality and affordability, we may find ourselves in a
situation wherein we can no longer help the population.
I am concerned about the decision to create general hospitals
without a structured business plan. The word “general” by
itself might be counterproductive because it suggests the
hospital can treat any manner of illness and it does not
highlight the public’s true needs. A general hospital is not
built based on a study of the population and popular diseases.
For its construction, rent is paid to a private company, which
fulfils its construction and installation contract, at which point
the government takes operational control of that hospital. The
little money this general hospital receives is spent paying the
private company and there is not enough left to treat patients,
which indebts the government. Instead, to improve existing
services there should be an inventory of the country’s hospital
capacity and an analysis of how they could be better used.
There are empty surgical theaters at certain times of the day
in private hospitals that could be used by the lines of people
in public hospitals.
Q: What is the thrust of ABC Medical’s relationship with
Seguro Popular?
A: Our relationship is strong but there are certain rules that
keep us from offering it more products and services. For
DISPARITY A CHALLENGE IN PUBLIC-PRIVATE COOPERATION
ALEJANDRO ALFONSOCEO of ABC Medical Center
VIEW FROM THE TOP
ABC Medical Center is a private institution in Mexico City
that offers treatment in the fields of oncology, neurology,
transplants, OB-GYN, pediatrics, traumatology, preventive
medicine and nutrition
48
Q: What is your added value proposition regarding
medical tourism?
A: Many people come to Mexico for plastic surgery but
we want to provide even more services. We performed a
liver transplant for a 7-month-old girl who weighed 8kg
using 200 grams of her aunt’s liver. She is alive and she will
recover. This is the kind of news we want other countries
to hear to attract patients. More than medical tourism,
what we offer is an efficient use of resources that leads
to affordable prices. A knee or hip transplant might cost
US$100,000 in the US. Here it is US$40,000. We must
follow the example of India, which has already become a
medical tourism destination for Americans. The cultural
difference and the actual distance between India and the
US are bigger than with Mexico, but India has talent and it
is open to promoting it.
Q: What are Mexico’s main requirements in terms of talent?
A: We need higher academic standards. Our future
generations will compete with future generations from South
Korea, India and Japan, where the pressure for excellence
is part of everyday life. Mexican students should demand
more rigorous programs from their academic institutions
to compete with the rest of the world. At Médica Sur, the
requirements to get into our program are very high, so our
residents are increasingly better. Only students with a GPA
above 9.5 can apply and we choose only 20 percent of those.
We have around 120 residents and interns and every year we
admit between 30 to 40 students. We also believe that the
learning experience and academic results are better when
physicians work with a small group of students.
Q: What role does Médica Sur want to play in the Mexican
health industry?
A: We do not want to fit into a role; we want to become
an example of good processes in the national and
international health industry. We want to show the
industry that a health service focused on the patient is
the most profitable model and that a sense of humanity
and responsibility are the main drivers of return. We will
also continue moving forward with technology and social
developments. We are an institution, not a business.
Q: What is Médica Sur’s strategy to ensure growth?
A: Médica Sur’s growth stems from two points. First, we seek
internal growth through the optimization of our processes.
This growth must be guided by a code of ethics to ensure
that we can provide quality service. Belonging to the JCI and
Mayo Clinic Care Network provides us a standard; however,
that is not enough because in healthcare we experience
changes every day. One major change is the increase
in ambulatory procedures in hospitals, which opens up
new opportunities and leads us to the second priority for
Médica Sur: implementing external growth through a larger
investment in diagnosis. Unfortunately, in Mexico there is a
lack of confidence in diagnoses and unethical practices are
common. There are many opportunities in this area. We will
be able to provide tools that will lead professionals to the right
diagnoses and in doing so, open access to a top-flight service
that is now privatized.
Q: Which values guide Médica Sur in an increasingly
competitive environment?
A: We have to work in a very competitive environment, but
we will never sacrifice the safety of a patient to economic
profitability. In our facilities, the average stay is two days, while
in public hospitals it is approximately 10 days. We are also the
only hospital in Mexico that publicly reports deaths that occur
in our facilities as well as infections and accidents.
Q: How are you delivering this message to the industry?
A: We created the Médica Sur Network to share our
ideal of making things better in Mexico. So far, we
have seven members and we have allies in Los Cabos,
Queretaro, San Miguel de Allende and Merida. They pay a
membership fee and we share our knowledge with them.
This network allows us to build a common front, nurture
better relationships with insurance companies, consolidate
purchases and share expenses.
CREATING ACCESS TO TOP-FLIGHT SERVICESMISAEL URIBEPresident of Médica Sur
VIEW FROM THE TOP
Médica Sur is a private hospital complex. With 31 laboratories
in Mexico City, one women’s clinic and two hospitals, it is a
member of the JCI and the Mayo Clinic Care Network. Médica
Sur also has a Pharmacovigilance Center
49
VIEW FROM THE TOP
Q: How does Grupo Christus Muguerza differ from other
hospital groups?
A: We are the only healthcare system to operate in Mexico as
a nonprofit organization, although fiscally we still pay taxes
because we are a large group. However, no partner takes any
of the profit for themselves and profit is entirely reinvested
in infrastructure and community service.
Reaching those most in need is fundamental in our day-to-
day. Christus Muguerza works with Operation Smile and has
already operated on around 500 children with cleft lips free
of charge. In 2016, Hospital Alta Especialidad operated on 12
children with congenital heart disease. These patients reach
our hospital through the charity Cardio Chavitos. A North-
American pediatric cardiology hospital helps us with the
equipment and teams are mixed Mexican-American.
Hospital Conchita in Monterrey is about to start a program
in laparoscopic gynecology surgery for women with
gynecological problems. There will be four groups of around
16 patients. This program does not only help people in need,
it also enables the head gynecologist to teach others how
to operate laparoscopically. Also, Hospital Del Parque, in
Chihuahua, has five years of experience providing free spinal
surgery for children with scoliosis or deformities.
Q: How has the hospital’s nursing program developed?
A: Christus Muguerza is involved in two nursing programs:
one with UDEM and one with the University of Chihuahua
as part of its community service program. The nursing
school has grown in recent years and now has around 600
students, whereas in previous years it saw averages of 120-
140. UDEM contributes to the program with its academic
value. It has long been a partner of ours as it used to own
the Clínica Conchita before we acquired it. We also send
bachelor’s and master’s students to train in the US. We
understand that not all the students will return to work
at one of Christus Muguerza’s hospitals but that does not
matter. Nursing is rewarded unfairly in Mexico because a
company has to take charge of hiring, taxes and insurance,
and is thus not able to offer the same benefits as the public
sector. IMSS, however, offers nurses three months’ holiday
per year and a two-month salary bonus at the end of the
year. This creates unequal working conditions. Some choose
to stay at Christus Muguerza because of our work ethic.
There are also 158 postgraduate residents studying a
specialty in our hospitals. This costs the group MX$50 million
(US$2.7 million) annually and it bears the full cost. Although
the government pays for medical residencies throughout the
country, private hospitals receive no subsidiary.
Q: What steps is Grupo Christus Muguerza taking to expand
its reach and what are its priority areas?
A: Surgical centers are moving away from hospitals, often
due to costs. We have acquired an ambulatory center in
San Luis Potosi and there is a center being remodeled in
Irapuato that will begin operating as a Christus Muguerza
surgical ambulatory center in August 2017. One of the largest
primary-care centers in Monterrey will also become a surgical
ambulatory center and will most likely open in 2018.
In September 2017, we will begin constructing a fifth
hospital in Monterrey, It will be the first hospital in Mexico
to follow a lean design, built with Perkins & Will. We
created an initial design and the firm is now drawing up
architectural plans based on our needs. I want it to be the
first sustainable hospital, with a water treatment plant,
energy sourced from solar panels and we are evaluating
whether to integrate oxygen processing, a common
practice in France and Canada.
In the next six months, we will begin performing complete
transplants in Hospital Alta Especialidad, the largest
hospital in our system. We will begin transplanting
pancreases, for which so far in Mexico there have only
been isolated efforts. This will be in partnership with the
Northwestern University Hospital in the US.
WHEN GENEROSITY, GROWTH GO HAND-IN-HAND
JUAN GALINDOMedical Director of Christus Muguerza Sistema de Salud
Christus Muguerza Sistema de Salud is a hospital group that
operates in Mexico and the south of the US. The group opened
its first hospital in Monterrey in 1934, and now manages nine
hospitals and 18 medical centers across the country
50
INSIGHT
INTERNATIONALIZATION ESSENTIAL FOR MEXICAN HOSPITALSRAFAEL ESPINODirector General of Amerimed
A boost in federal government support would bolster and
expand Mexico’s medical tourism, creating jobs and helping
to keep doctors from leaving for greener pastures, says Rafael
Espino, Director General of Amerimed, a hospital network
focused on treating tourists. “We need a coherent medical
tourism policy. The Ministry of Health and the Ministry of
Tourism should work together to promote the country’s
advantages through federal funding, better financing and
business promotion.”
The lack of a cohesive policy is keeping the hospital on the
fringes of the medical tourism industry despite the low prices
and top-notch doctors and nurses that make Mexico an
attractive destination to receive medical care. “The country has
access to state-of-the-art equipment from the US or Europe at
a good price, because Mexico has trade agreements with most
western countries,” says Espino. “We are more focused on
emergencies or consultancies. Medical tourism, which consists
of programmed surgeries or treatment, represents only 3 or
4 percent of our activities,” he says.
Espino says better policies could increase employment
and keep doctors in the country, giving Mexican cities an
aggregated value. He also cites changes in US healthcare
policies such as the current US administration’s rebuttal of
the Affordable Care Act, that could increase the number of
US tourists traveling abroad for medical care. That number,
according to Patients Without Borders, reached 1.4 million in
2016. “If healthcare prices do not drop with the suspension
of the Affordable Care Act (Obamacare), Mexico will be the
first option for Americans due to proximity, the number of
facilities near the border and low prices further favored by
the peso’s depreciation.”
The exchange rate, however, might favor his business. “Mexico
could become cheaper for foreigners, therefore more tourists
will be attracted to the country and the demand for hospital
services will increase.”
Amerimed has branches in two of Mexico’s main tourist
destinations: Cancun and Cozumel. Most of its patients are
vacationers who have been in an accident or have gotten
sick. “With more than 20 years of experience, our network has
received the majority of foreign patients in the country,” says
Espino. The hospital, which is focused on providing quality
services in strategic locations, has a patient profile that breaks
down to 70 percent Mexican tourists and 30 percent foreign.
According to Espino, Amerimed services are mainly delivered
to the private sector but as one of the few well-equipped
hospitals in its chosen locations, it frequently supports IMSS
and ISSSTE with X-rays, CT scans, MRIs and laboratory
services. The hospital network also participates every year in
government tenders.
To ensure its growth ambitions, Amerimed is working to
improve quality and the number of specialties available at its
hospitals. It is also obtaining JCI certification for both facilities
in Cozumel and in Cancun. “The JCI has good recognition
abroad and it is important for us as an international health
service provider to be certified by the most important
international agencies,” Espino says. Amerimed already is
certified by the General Health Council in Mexico and the
Canadian Accreditation Council. “We are the only hospital in
Cozumel that is internationally certified. This is important since
the island is a frequent destination for the main world cruise
lines, which like to have quality medical facilities available on
land,” says Espino.
Amerimed is also looking forward to branching into other
tourism locations. The company is building a boutique hospital
in Playa del Carmen, which will have a variety of medical
specialties, an intensive care area and two surgery rooms.
There also are plans to open a small hospital in Acapulco.
“This will be a new direction for the business model because
97 percent of the tourists in Acapulco are Mexicans, so the
business will be focused on national patients instead of
international ones,” Espino says.
To execute this growth, Amerimed has partnered with a
private equity fund in the US and is looking for additional
funding to increase its infrastructure and services. “We are
open to working with other private equity funds that want to
invest in the Mexican healthcare sector,” Espino says.
51
Q: In which areas have you been investing?
A: We have been working on updating our diagnostic
imaging equipment. We use German machines in this area
and next year we want to renew our surgical equipment
and to invest in an advanced laparoscopic surgical theater
so we can offer this service. The hospital is 10 years old
already and in the health industry you have to be constantly
updating. Equipment becomes obsolete and there are
constantly new inventions to help diagnose and care for
patients. We want to offer the best service to our patients
and stay up to date.
Q: To what capacity does the hospital operate and what
are your expansion plans?
A: We are operating at around 60 percent of our capacity.
The hospital has been expanding significantly since we
changed our focus from women to become a general
hospital. From 2015-2016, we grew 50 percent and we are
looking at growth of 30-40 percent for 2016-2017. We have
achieved this goal through our various client segments,
our quality of service and by seeking out doctors and
insurance companies that do business with us because we
offer much transparency. We also see doctors as clients
and we want them to enjoy their time here. They are
treated with a super-personalized service and we want
them to know that there are many people available to help
them with anything they need.
Q: How do you attract patients and what are the advertising
rules surrounding hospitals?
A: Customer service is one of our main values and safety
is our top priority, followed by service. We mostly attract
patients with our service. We firmly believe that by providing
a service that is humane and friendly, patients will come back
to us time and time again and will recommend us. There
is also the patient’s family, doctors and insurers, for whom
we have different lines of appeal. COFEPRIS’ advertising
regulations cover the entire health industry. Within that, there
are rules that cover the advertising of services. As a hospital,
we can advertise; it is not very restrictive. More than a legal
restriction, we have a moral obligation to tell the truth so
that the business can be sustainable.
VARIETY OF SPECIALTIES SPURS GENERAL HOSPITAL AMBITION
MIGUEL CASTILLODirector General of Hospital Sedna
VIEW FROM THE TOP
Q: How do you work with the public sector?
A: We do work with the government and tend to many
patients through the Seguro Popular, mostly with breast
cancer. Our partner’s oncological center is also accredited
to tend to rectal, colon and prostate cancer. We are the first
hospital in El Bajio to be accredited to offer recto-colon
cancer treatment. When working with the Seguro Popular,
a hospital must be accredited in certain specialties from
the institution’s catalogue of services. Once accredited, the
hospital tells the institution what space it has available and
based on that, patients are sent to the hospital. We provide
the same service when working through the government
as we do with private patients.
Q: What is the strategy behind offering high-risk pregnancy
services over normal pregnancy services?
A: High-risk pregnancies are in the Seguro Popular catalogue.
There are many institutions that offer services for general
pregnancies but very few offer a high-risk specialty. Given
our history in gynecology, we have the experience and the
expertise, so we are confident we can offer this service. We
do not want to open specialties in which we cannot offer the
required service.
Q: What are the hospital’s short-term plans?
A: We would like to continue building on our vision of
humane treatment. This begins with our people and so in
2017 we will be investing greatly in them. We also have
areas ready for growth and we could increase our capacity
by 40 percent. We have the space to grow and we have
140 doctor’s offices that could also grow by 20 percent. We
want to focus on obesity and bariatric surgery, one of the
country’s main challenges — epidemiological alerts have
been issued for diabetes and overweight in the country. We
are building an obesity clinic at the hospital for the integral
treatment of this condition and metabolic disorders.
Hospital Sedna is a private hospital located in Mexico City
that originally focused on female health but has expanded
to offer over 30 specialties and aims to become a general
hospital offering integral services
52
NATIONAL HEALTH SYSTEM UNDER THE SPOTLIGHT
INFOGRAPHIC
0
10
20
30
40
50
60
70
80
Oth
er p
ublic
inst
itut
ions
Pri
vate
inst
itut
ions
PE
ME
X,
SE
DE
NA
, SE
MA
R
Seg
uro
Po
pul
ar
ISS
ST
E
IMS
S
POPULATION DISTRIBUTION ACCORDING TO HEALTH INSTITUTION (DEC. 2015 IN MILLIONS)
74,0
32,4
37
12,9
73,7
31
57,10
5,62
2
1,893
,946
2,18
9,51
4
1,824
,595
AFFILIATES OF EACH HEALTH INSTITUTION AS OF DEC. 2015 (millions)
� 24.16% Workers
� 10.71% Nonworkers
IMSS AFFILIATES IN 2015
Insured Pensioned
Affiliated
� 16.44% IMSS-PROSPERA
IMSS-PROSPERA
Non-A�liated
Pensioned
Insured
Pensioned IMSS
Pensioned non-IMSS
Nonworkers
Workers
IMSS AFFILIATED IN PERCENTAGE (2015)
|
Rights hold
ers
|
Family
| IM
SS-P
ROSPERA
� 4.69% Pensioned non-IMSS
� 0.36% Pensioned IMSS
� 30.02% Insured
� 3.41% Pensioned
� 10.22% Non-Affiliated
74,032,437IMSS affiliated
population
GOING “UNIVERSAL”
Universal health coverage is a concept established by the World Health Organization.
• Implies making sure people have access to health services without affecting their finances
• Upholds quality and effectiveness in promoting healthcare, as well as prevention, diagnosis, treatment, physical therapy and palliative care
As the system has grown, so too have the challenges it
faces. OECD recommendations to strengthen the Mexican
health system include expanding coordination between
institutions, aligning the standardization of processes,
boosting competition among providers and
promoting the effectiveness of hospitals.
KPMG agrees with this needed coordination and
goes even further. According to the financial
services company, “a population’s health is an indispensable
value for economic development and social welfare.” This is
why better coordination between financial services firms,
suppliers, associations and institutions is required.
Born in the early 20th century, Mexico’s National Health
System has evolved through the years. Besides the widely
popular IMSS, the system now includes state oil giant PEMEX
and military facilities
Population aged over 65 will grow, impacting health services
121 millionMexicans
• 150 million: 2050 projection
2.2 children per woman
• Life expectancy:
75 years• OECD average:
80 years
2
6
10
203020202017
7% 10%
• 2,353,596 births were recorded in
Mexico in 2015
• 51 percent of Mexicans are women
and 49 percent are men.
• 1 percent: The annual growth rate of
the population
53
*Cardiovascular disease, cancer and diabetes are the most frequent
THE STORY STARTED 112 YEARS AGO
Sources: IMSS, KPMG, INEGI, OECD, WEF, Economist Intelligence Unit
The bad: Rising obesity,
tobacco use and chronic
illness (*)
The good: Steady
reduction in infectious
diseases
0 20 40 60 80 100
Zacatecas
Yucatan
Veracruz
Tlaxcala
Tabasco
San Luis Potosi
Puebla
Oaxaca
Nayarit
Morelos
Michoacan
State of Mexico
Hidalgo
Guerrero
Guanajuato
Chiapas
Campeche
Tamaulipas
Sonora
Sinaloa
Quintana Roo
Queretaro
Nuevo Leon
Mexico City
Jalisco
Durango
Chihuahua
Colima
Coahuila
Baja California South
Baja California
Aguascalientes
PERCENTAGE OF POPULATION THAT WORKED IN THE INFORMAL SECTOR PER STATE IN Q416
—57.2% National average
1905 Founding of Mexico's Hospital General
1922 Founding of the Public Health School of Mexico
1931 Rural hygiene program. Vaccination, school hygiene and mother-child services
1944 IMSS started providing services in Mexico City. In 1952, construction began on Hospital La Raza; today, the first IMSS Hospital Center is among the most important of the country
1917 Founding of the General Health Council (CSG) and the Public Health Department
1937 Founding of the Ministry of Public Assistance after the merger of the Department of Child Social Assistance and the Board of Public Welfare
1943 Founding of the Ministry of Salubrity and Assistance (today the Ministry of Health), after a merger between the Department of Public Salubrity and the Ministry of Public Assistance
2003 Founding of the Seguro Popular
For every 1,000 patients who need magnetic resonance imaging, there are:
In Mexico2.5 medics1.6 hospital beds
OECD average3.3 medics
4.8 hospital beds
CHALLENGES TO FACE
1960 Founding of ISSSTE
6%of Mexico's
GDP is attributed to the health
sector
US$500per capita
in 2016
US$570per capita in 2020
Increase in health spending
1987 Founding of the National Institute of Public Health
The Mexican Health System has many challenges. Chief among them is a lack of infrastructure.
54
INSIGHT
FOCUSED GROWTH TAKING MONTERREY FORWARDFRANCISCO VILLARREALMedical Director of Swiss Hospital
With declining fertility rates and increased life expectancy,
Mexico’s population is slowly but surely aging. With a
more advanced age comes a host of health issues not
experienced in younger years, including dementia, a
degeneration in ocular health and a weaker heart, all of
which require care.
The increased need for heart care has not escaped the
notice of surgical hospital Swiss Hospital in Monterrey, run
by Medical Director Francisco Villarreal. Villarreal noted
an increase in the number of elderly patients in their
emergency and intensive care units toward the end of 2016
and the beginning of 2017. “Over recent months, we have
been asked to offer hemodynamics.
There have been so many patients
that we have had to channel them to
other hospitals. We are now working
on a business plan with investors to
offer these services,” says Villarreal.
The advance of the technology has
led to a reduction of open heart
surgeries thanks to techniques such as heart valves or
through hemodynamics. The Hemodynamics Society
defines the science as “an important part of cardiovascular
physiology dealing with the forces the pump (the heart) has
to develop to circulate blood through the cardiovascular
system. Adequate blood circulation (blood flow) is a
necessary condition for adequate supply of oxygen to
all tissues.” Two of the main issues in hemodynamics are
hypertension and congestive heart failure and, according
to ENSANUT 2016, 25.5 percent or 32 million Mexican
adults are hypertensive. The OECD estimates that 101,600
people are admitted to hospital yearly for congestive heart
failure in Mexico.
Despite the number of hemodynamic issues, treatment has
simplified greatly over the past 30 years. “By inserting a
catheter and injecting a substance a blockage is cleared
and the patient goes home. The process is simple and
easy but bears a high cost. The number of heart surgeries
has been drastically reduced, as many use hemodynamics
or implant valves. In addition, patient recuperation after
hemodynamics is immediate as there is no surgical
opening and no need to stay in intensive care,” explains
Villarreal, adding that he hopes the hospital will soon be
approved to perform these surgeries.
Transplantations are also high on the hospital’s list. “After
hemodynamics, we would like to begin offering organ
and tissue transplants, mainly kidneys as they are most in
demand in Mexico and are not overly complicated,” says
Villarreal. In addition to offering this further specialty,
Villarreal says that by 2018-2019 Swiss Hospital would
become a teaching hospital, having already reached an
agreement with Del Valle University
in the State of Mexico.
“The number of places available
in the National Medicine Exam
versus the number of students is
a problem, mostly of planning. We
cannot create so many medical
faculties if there is nowhere to train
the students. Around 40,000 students graduate annually,
yet there are only 7,000-8,000 places. Those 32,000
students that do not make it go to pharmacies and open
a consultancy, earning MX$50 (US$2.8) per appointment
after studying medicine because there are not enough
hospitals,” says Villarreal, adding that private hospitals
opening up to teaching may be a type of salvation that
allows more doctors to specialize. In addition, he explains
that while some areas are high in demand, others are
forgotten. “Everyone wants to be a general surgeon, a
pediatrician, oncologist or anesthetist heart surgeon. No
one wants to be a pathologist or a geneticist, for example.
Students want the adventurous specialties like birthing.
They want to see blood,” he adds.
Ultimately, the problem lies with the high number of
students accepted to study medicine and the few
residencies available in hospitals. “We need to reduce
the number of students accepted to study medicine. Why
produce more doctors than the country needs?”
101,600people are admitted to hospital yearly for
congestive heart failure in Mexico
55
INSIGHT
The conundrum of receiving medical care in Mexico is
this: the public sector has long wait times but the private
sector is expensive. Mexico City clinic AsMed believes the
answer lies in its business model of providing ambulatory
and short-stay care.
AsMed’s model relies on alliances with doctors, explains
Ricardo Bojalil, Director General of AsMed. When these
doctors recommend a minor surgery to a patient, they
both go to AsMed’s clinic to perform the procedure in
a high-tech environment and in a short amount of time.
For the patient, the procedure is offered at a lower price
than in most hospitals, which is also an attractive model
for insurance companies because they would then have
fewer costs to reimburse.
“We are continually trying to make our operations more
efficient, so we can lower our prices even further, while
maintaining quality, processes and certification,” says
Bojalil, adding that although the clinic’s target is not
the public sector, indirectly it is involved in that sphere
because it works with the third party that performs
hemodialysis for IMSS. “We take care of part of its
contract, performing hemodialysis here in the clinic and
taking care of vascular access,” says Bojalil.
This is a market with great potential. According to 2014
INEGI figures, the value of ambulatory care services
represents almost 21 percent of paid health services in
Mexico, which means a monetary value of MX$190.6 billion
(US$10.6 billion), 0.9 percent of GDP. This is only slightly
less than the value of hospital services, representing 28
percent of paid health services, MX$254.2 billion (US$14.1
billion) or 1.2 percent of GDP. Patients can be assured
they are receiving top-of-the-range care, says Bojalil.
AsMed continuously works to maintain its accreditations;
the clinic will need to renew its CGS certification at the
end of 2017 but Bojalil says no extra effort will be needed
because the clinic strives to maintain high standards year
in and year out, regardless of whether the hospital is
under audit. It is also looking to receive international
validation, having recently decided to aim for JCI
ambulatory accreditation. “It is a daily commitment to
patient safety and security measures. We are making
some changes to the plans of the building but processes
are continually improved upon.”
In addition, the clinic maintains low costs for medical
devices, buying only the equipment needed to perform
the services it offers and looking for machines that have
several functions. “In this way, the same machine or
laparoscopic instrument can be used to perform different
surgeries, especially since those we offer are not very
complicated,” Bojalil says. “We offer the best technology
at affordable prices.”
Although still small, the company is already giving back
to the community. Since 2016, it has participated in
Cinépolis’ ophthalmological charity program Del Amor
Nace la Vista (Sight is Born from Love), performing
around 15-20 monthly surgeries for the beneficiaries of
the program. “We dedicate one or two days per month
to performing these procedures for Del Amor Nace la
Vista,” Bojalil specifies.
The company is validating its business model and then
hopes to scale across Mexico. “We have made some
adjustments from the first model, moving from a fully
ambulatory model to short-stay surgeries.” In 2016, AsMed
saw around 30 percent growth. This is much lower than
the growth rate of 100 percent seen in past years. Bojalil
explains that the clinic focused on making adjustments
and maintaining quality rather than expanding. Currently
operating at 60 percent capacity, its target is to reach
80 percent by the end of 2017. It will also expand: Bojalil
says the clinic will open two new operating rooms in 2017.
QUICK TURNAROUND FOR SIMPLE SURGERIES
RICARDO BOJALILDirector General of AsMed
There are 340 doctors registered with AsMed in Mexico City
56
In parallel, we are extending our capabilities to the private
market through focused investments.
Another growth strategy we are analyzing is the
development of our own clinics and hospitals with a focus on
the treatment of noncommunicable diseases and minimally
invasive surgery. The primary causes of death worldwide
are cardiovascular diseases, followed by cancer. Vitalmex is
an expert in treating these ailments and that is where our
development plans also focus. This is a high-growth area
in healthcare and we are carrying out market research to
analyze possibilities in that segment.
Finally, we believe there are opportunities to export our
business model. We are successful in Mexico and the
healthcare challenges that we face and the given services
are similar in many countries.
Q: Why expand to Europe when many exalt the
opportunities to be found in Mexico?
A: I believe that our business model is replicable in many
countries because healthcare challenges and trends are
similar to those in Mexico. We already have a great deal
of knowledge of integrated services and believe there
are many opportunities to create efficiencies for existing
hospitals in other countries. What we offer is a proven
model to help them reduce their capital investment
costs, increase their productivity, optimize their installed
capacity and improve quality indicators, as well as
treatment techniques.
Mexico is a market with a great deal of potential. However,
there are also many opportunities abroad, in both emerging
and mature markets. In places like Germany, Switzerland,
the UK, France, the US and Austria, the cost of medical
devices and disposables is increasingly high. In those
countries, hospitals and insurance companies are looking
to reduce costs and we believe that our integrated solutions
are an attractive and proven way to do so. For example, the
owner of 12 hospitals in Switzerland invited us to evaluate
their operations. It turned out that we could reduce their
costs by around 15 percent through integrated services.
Q: Which of your products differentiate you from your
competition?
A: The first product we offer to public institutions are
personalized solutions based on specific health needs and
challenges. This product has worked well in Mexico because
it offers flexibility for public healthcare providers. We are
working with three imaging clinics in the north and south
regions of Mexico, where we are looking to improve access
to diagnoses for local communities. The second product we
offer is integrated services, a pay-per-procedure strategy
for elective surgeries and procedures. The hospital or
clinic pays us for completed procedures, which means
the customer does not need to invest in fixed assets and
inventories to offer health services. It is a win-win situation
because we profit through the correct management of
economies of scale in the procurement of medical devices,
high logistics efficiency and high productivity with our
latest-generation equipment. Our third product is inventory
management. We are experts in transporting medical items
and devices. Because of the volume that we manage in 210
hospitals in the public sector, we offer this service to private
hospitals as well with significant reductions in variable
costs and permanent availability of materials. Our fourth
product is the management of health centers and hospitals.
Our vision focuses on three segments: infrastructure
development for the public health system, working with
insurance companies to reduce the cost of premiums
and satisfying the needs of patients at the bottom of the
socioeconomic pyramid through micro-credits.
Q: What are your expansion plans over the next several years?
A: Our plans detail three strategic lines of development and
growth from two main sources. The first line is to maintain
business with our public sector clients. The main products
we offer to public institutions are personalized solutions
designed to address the national health coverage challenge.
MEXICAN COST-REDUCING TECHNIQUES TO HIT EUROPEJAIME CERVANTESCEO of Grupo Vitalmex
VIEW FROM THE TOP
Vitalmex is a consultant that helps clients improve their business
model. It has three main lines of business: imaging diagnostics,
surgery and the treatment of chronic diseases. Originally
established in Mexico, it has now set its sights abroad
57
basic care. For example, access to primary care in doctors’
offices located in pharmacies out-of-pocket. The theme of
effective and timely access is vital for Mexico.
Quality remains another priority issue. Different systems
in Mexico recognize there is a lot of internal variation and
even more variation across systems. If this is not addressed
within the next few years, it should become a clear priority for
any next administration. This is one of the important topics
people will put on the table. Leaving quality aside, there
has been progress in cost reductions and efficiency efforts.
Many initiatives have been in the media like the consolidated
purchases but there is still ground to cover.
Innovation is emerging, often through interesting startups, but
there has been much less investment in Mexico to-date than
in other geographies. Start-ups at different levels of maturity
need to undergo different rounds of financing and access to
funds for innovation in Mexico remains an issue. While there is
more access to funding now than before, it is still not enough
to sustain a robust market. The startup market is particularly
difficult on the retail side. If a model relies on consumers
signing up and paying a small amount each month, investors
often find between two and three years down the line that
the numbers may not materialize. The quickest avenue to
market is still through an institutional buyer. Recently, we were
talking to a start-up that offers micro-insurance to individual
consumers for healthcare services but it is now morphing
into a company providing care management products to
institutional buyers interested in capping their employee or
insured risk – a B2B model. Speaking broadly, there is a large
amount of insecurity in the Mexican labor force. Consumers
with poor job security may not want to commit to regular
installments. The percentage of people in the private health
insurance market is still relatively small; typically the largest
part is sponsored through employer coverage.
Q: Last year, you told MHR that companies were not making
drastic changes in the face of global economic challenges.
What is your view now?
A: In both the public and private sectors, we have seen more
significant efforts to reduce costs, which have taken different
forms. Organizations are delivering more consistently against
programs they have developed in previous years and are
looking forward to a tangible impact by 2018.
In the private health provider and insurance sectors, many
organizations are looking more drastically to leverage digital
and advanced analytics tools. In some cases, this is generated
by the local market environment and led locally; in others,
this may be an area of focus led by headquarters that are
abroad. There is definitely a step-change, meaning it is not just
business as usual but quite often a part of a comprehensive
effort to revolutionize core processes and improve customer
experience and retention. This is where digital has diverse
functionality, supporting cost reduction, growth and customer
experience improvements.
Q: To what extent are digital advances penetrating hospitals?
A: It differs between the public and private sectors. In the
public sector, there seems to be an issue of “bottlenecking”
in many organizations in how much can be done to improve
information-management systems or to introduce analytics
and digital platforms on a national scale. There are often
small, grass-roots innovative initiatives in individual hospitals
or regions, but these can only be scaled up through the
center. There are still problems around digitalization,
with frequent delays in core programs that go back a few
years. In the private sector, the situation is a little different.
Particularly, the problems of health insurance businesses in
Mexico within international firms that are faced locally have
often been addressed in other geographies and solutions
can be deployed at speed.
Q: What are the most prominent issues you have noticed?
A: There is still a general issue of access through the systems,
both in terms of specialized care, where there are many
delays, and in basic access to primary care. What we have
seen is consumers finding other avenues to secure access to
LITTLE, BUT PROMISING, CHANGEÁNGELA SPATHAROU
Partner at McKinsey & Company
VIEW FROM THE TOP
McKinsey & Company is a global management consulting firm
that serves leading businesses, governments, NGOs and not-for-
profits. It is the largest and longest-established management-
consulting firm in Mexico, working in every major sector
58
Q: What makes Fligoo different from its competitors in
terms of added value?
A: We compete directly with IBM Watson Health. We
have close relations with the company in San Francisco
as we share an office. However, it did not create the
algorithms or technology it uses. IBM Watson Health’s
focus is mostly consulting, so they implement a solution
and then sell another and another. It will cost millions
and take years. Fligoo delivers a much faster impact and
identifies a client’s exact needs. Finally, we built all the
technology in-house. All our employees are engineers
with a strong background in data and a lot of experience.
Q: What are the first steps to be taken in a hospital that
does not have electronic medical records?
A: The first step is data collection. This can be challenging
in places with no digital records or prescriptions, so we
must analyze where the information should be taken from.
Most times it is a mess, so we must recognize and identify
the information that is available and make it digital. The
second step is to identify what will help a client or the
industry from the information available. Many companies
try to begin analyzing data as soon as possible but first
we must understand the company’s vision and which
elements will help them get there, as well as identify
patterns and key factors in the data. The third step is to
develop the solution, the algorithm or technology that can
process millions of pieces of data and extract the most
important information to come to conclusions must faster.
Many companies say they do data analysis and that they
are innovative but we truly impact a company’s results; we
try to decrease their costs, increase revenue and profits,
accelerate processes and save employee claim costs.
Q: What are the main challenges you have encountered in
implementing solutions? How have you overcome them?
A: We often go to a warehouse and find boxes of paper,
which is not organized; it is hard to find a person’s file.
Fligoo strives to show impact and results in one quarter,
to show clients that, although they may have nothing
today, in one quarter they will have some data and some
analysis. We have scanned millions of sheets and forms.
It is true that companies see challenges in digitalizing.
They struggle to think about data when they do not even
have digital processes. We explain we can do it all for
them and structure the data. We explain it is not a huge
investment and does not take a lot of time. Thinking of
Big Data, ArtificiaI Inteligence (AI) and analytics can
seem complicated for those who do not have a tech
background but we can implement it easily.
Q: How adaptable are your solutions to clients?
A: That is our main focus when we create a product.
We know that our solutions have to be easy to integrate
and without taking a long time to implement. A client
does not want to spend a year implementing a piece of
software, paying for engineers and hoping it will work.
Our solutions are therefore very tweakable, ad-hoc for
each client. We ask them what they want to accomplish,
what is most important for them and then adjust the
algorithm accordingly to make it work for that client.
Technology must be able to adapt to clients that have
had a system in place for 10-15 years and are reluctant to
change. We must make it as easy as possible for them.
Q: What is your strategy to grow the company?
A: We have plans to open an office in Mexico City, another
in Barcelona and in 2018 we would like to go to Asia,
perhaps to Singapore, Hong Kong or Tokyo. We will be
investing a lot in expansion in 2017-2018 and trying to
show how good we are and how we can solve problems
globally. We work in other sectors too, such as finance
and banking, although healthcare represents 60-70
percent of our business. Expanding across countries and
sectors simultaneously is a big challenge. We have also
just confirmed we will be opening new business units
for education.
REAL DATA ANALYSIS IMPACTS RESULTSLUCAS OLMEDOCEO of Fligoo
VIEW FROM THE TOP
Fligoo is a US-based company that provides data solutions.
It aims to solve complex problems and provide extraordinary
results, and has the mission of democratizing world opportunities
through technology and innovation
59
FLIGOO CASE STUDIES
IMPROVING ELECTRONIC HEALTH/MEDICAL RECORDS USABILITY THROUGH SEARCH AND DICTIONARY SYNONYM DATABASES
CHALLENGE
The client needed to significantly reduce costs
and improve its complex and expensive health
revenue cycle that employs multiple channels
to collect from all payers regardless of the
case. The management platform works with
the cycle of claims submission, medical coding,
charge capturing, payment posting, denial
management services and account receivables.
Even though it is a core initiative, people from
other projects cannot be relocated and building
a new internal team is too expensive and would
delay the process for months of useless billing
costs.
OUTCOME
The solution catalogued cases into categories using data
on treatments, insurance, bill amounts and credit scores,
among others, identified the optimum channels and
timing for communication and determined the maximum
investment that should be made per case. Conversion rates
CHALLENGE
The client needed to improve the search
component for all its products since it would
not deliver an accurate result unless the user
typed the exact name, which was unusual,
especially for non-technicians. A mistake in
a record can have an impact on a patient’s
life. The health system has a large and
complex vocabulary. The name of conditions,
medications, immunizations and diagnoses
are difficult to learn and even more to spell
for most people. The search engine would not
understand typos, partial words, words in a
different order or synonyms. The probability of
not finding the desired result was high.
OUTCOME
In three weeks we were able to predict what the user was
looking for with 99 percent accuracy with three letters.
The company was able to improve the usability of all its
products through search speed, and reduced the number
of mistakes in health records in less time than expected.
We adapted our search engine to its platforms in a way
that is optimized for health vocabulary, we built a database
that relates the synonyms that each name has across all
health dictionaries and we applied machine learning based
on the specific user and the population to provide the most
accurate results.
SOLUTION
Fligoo has a proprietary search engine that combines
phonetic, spelling and machine-learning algorithms that
understand typos, words that have a similar phonetic
composition and it is optimized to search for partial words
or sentences. The expected time for development was two
months, with under 80 percent accuracy, but we delivered
it in three weeks with 99 percent accuracy at 34 percent
of the cost expected.
REDUCING REVENUE CYCLE MANAGEMENT COSTS WITH MACHINE LEARNING
improved progressively as the machine learned about cases
and the company saved millions in useless billing costs.
SOLUTION
A mixed in-house and nearshore Fligoo team composed
of eight senior engineers worked on this project, applying
their expertise in the industry and with Big Data. The project
kicked off on-site in the client’s office for four weeks and
was continued remotely from San Francisco and Argentina,
with the leaders traveling to the company’s site every four
weeks to keep the project going almost as if on-site while
being efficient on budget as well.
We mined the company’s complete history of cases with
machine learning to identify patterns among customers,
cases and response behavior in the past to each stage
of the cycle (answered, partially paid, completely paid,
appealed, etc.). We were able to understand the different
kinds of cases the company usually dealt with and built a
model that analyzed every situation in real time to define
the optimum collection procedure.
61
Besides better services, patients also require access to new innovative medicines,
which in Mexico can take years. Due to increasingly constrained public sector
budgets, the pace of purchasing expensive, innovative or new medicines is
gradually slowing. As a result, Big Pharma companies have been turning ever
more to the private sector for sales and growth. However, many Big Pharma
companies have also been impacted by world events such as the election of US
President Donald Trump, the peso’s depreciation and worldwide economic and
political uncertainty. Caution has become the rule of thumb for many companies.
This chapter will provide an overview of the largest pharmaceutical companies
in Mexico, focusing on the economic challenges they face and how to overcome
them, how they are ensuring patients have access to their products, their recently
released drugs and the medicines they have in the pipeline. Interviews held
with the CEOs and Director Generals of the sector’s biggest players reveal how
important Mexico is to their Latin American and global strategy. Insightful Q&As,
informative articles and original analyses bring this key segment into focus.
BIG PHARMA
3
63
CHAPTER 3: BIG PHARMA
64 ANALYSIS: Uncertainty for the Present, Hope for the Future
66 VIEW FROM THE TOP: Pedro Galvis, Merck
68 VIEW FROM THE TOP: Félix Scott, Sanofi
69 VIEW FROM THE TOP: Raúl Camarena, Aspen Labs
70 VIEW FROM THE TOP: Rodrigo Puga, Pfizer
71 INSIGHT: Mario Sturion, Janssen
72 VIEW FROM THE TOP: Karel Fucikovsky, Pierre Fabre Médicament
75 ROUNDTABLE: What are the Greatest Challenges Pharmaceutical Companies Face?
76 VIEW FROM THE TOP: Alexis Serlin, Novartis
77 ANALYSIS: Pharmaceutical Deals Completed in 3Q16 Through 2Q17 over US$1 Billion
78 VIEW FROM THE TOP: Oscar Parra, Lundbeck
80 VIEW FROM THE TOP: Vincenzo D’Elia, Alfa Wassermann
81 INSIGHT: David López, BioMarin
64
UNCERTAINTY FOR THE PRESENT, HOPE FOR THE FUTURE
“In 2016, the Mexican health industry saw
one of its toughest years, achieving single-
digit growth in terms of value due to the
introduction of new products and price
increases,” says Raúl Camarena, General
Manager of Aspen Labs Mexico.
This situation has led some companies with interests
in Mexico to take precautions, according to Vincenzo
D’Elia, Director General of Alfa Wassermann. “We have
seen significant currency devaluation, which has lifted the
cost to import products and increased our operational
costs. There are many services we have to cover in foreign
currencies. In some cases, we have to take the loss, but
we must also reduce and relocate resources. For example,
if we had three projects planned for next year, we would
only go ahead with two.”
Despite the headwinds, the industry overall remains
optimistic, partly because of the diversity of investment
in the country. Speaking to El Universal in February
2017, Cristóbal Thompson, Executive Director of AMIIF,
downplayed Trump’s impact on the pharmaceutical over
the long run. “Trump has talked about repatriating plants
but in the case of the pharmaceutical industry it does not
apply because [our industry does] clinical research. In
addition, we attract investment from Japanese, European
or Latin American companies,” he said.
THE BRIGHT SIDE
There is good reason to be hopeful. According to the
report The Mexican Pharmaceutical Industry, News,
published by KPMG, Mexico’s pharmaceutical market is
in a good position. KPMG says the segment is among
the top 15 in the world and second in Latin America,
impacting 161 national economic sectors and providing
74,000 direct jobs and more than 300,000 indirect jobs.
In addition, Mexico accounts for 1 percent of the global
Big Pharma market, with an impact on the country’s GDP
of about 6 percent.
Transnational companies are banking on Mexico’s industry
potential and working together with public institutions
to empower growth in the sector. Novartis established a
five-year plan in agreement with the Ministry of Health to
increase clinical research. Also, the company is confident
enough about Mexico´s leadership in the industry that
it is building the Novartis Center of Operations for Latin
America in Mexico. “This project is a great opportunity
Big Pharma knows there is a growing market in Mexico
– 20 of the world’s 25 top pharmaceutical companies
are already here, according to ProMéxico – and they are
hungry to improve market share, introduce innovative
products and expand the country’s blossoming generics
markets. But they remain hampered by strict regulations
while dealing with a weakened Mexican currency that is
driving up prices.
“We are a heavily regulated industry and even more so
due to our internal compliance with government policies.
In Mexico and Latin America, our time-to-market for
drugs is getting slower,” says Karel Fucikovsky, Director
General of Pierre Fabre Médicament LATAM. He points
to the registration process for new products as among
the hardest hurdles with which to comply, even with
recent moves to simplify processes and time frames.
“Unfortunately, we have examples of novel drugs that have
been in the registration process for almost six years and
there is still no answer as to when market authorization
will be granted. This obviously generates financial and
business forecasting issues for us, plus big questions from
our partners in Europe trying to understand the situation.”
The companies understand the necessity for strict
oversight but point to the need to improve access to
innovative medicines in a country that is aging and hence,
seeing greater prevalence of chronic diseases. Further
hampering their efforts is a government that has tightened
its purse strings and curbed the purchase of these drugs
and treatments. At the same time, more substances
have been liberated, helping spur growth in the generics
segment. “Thirty-seven active substances have been
liberated through our generic strategy, which represent
MX$25 billion (US$1.4 billion) in savings while an extra two
million people can be treated thanks to these savings,”
says Julio Sánchez y Tépoz, Commissioner of COFEPRIS.
EXTERNAL IMPEDIMENTS
Outside factors are also pressuring the sector. US President
Donald Trump, elected in November 2016, has publicly
called for lower drug prices and also targeted companies
doing business in Mexico, leading directly to the weakening
of the Mexican peso.
ANALYSIS
A tough regulatory environment and the impact of a weaker
peso are among the hurdles Big Pharma companies face in
Mexico but the general landscape provides optimism and
suggests strong growth ahead
65
“With 121 million inhabitants, excellent professionals and a
decent level of infrastructure, there should be much more
clinical research in Mexico,” says Rodrigo Puga, President
and Country Manager of Pfizer Mexico. “This does not
happen because administrative processes and institutions
delay procedures more than they should. The company
has over 400 research centers in Mexico, although it is
still an incipient process. According to AMIIF, Mexico
could be looking at a US$500 million investment in
clinical research in the near future. Pfizer will invest US$16
million in Mexico in research in 2017.” US-based Pfizer is
one of the world’s leading biopharmaceutical businesses.
Mexico’s public health sector is also extremely cognizant
of the urgent need to encourage people to see doctors
earlier in the disease cycle. Its approach is to conduct
clinical research, speed up bureaucratic processes,
improve transparency in the public procurement of
medicines and to promote prevention programs.
However, according to Sturion, there is still much work
to be done. “For Mexican healthcare, prevention is still a
hope but it is a challenging area to move in. The actions,
resources, programs and initiatives are still limited across
the country,” he says.
According to KPMG, Mexico has 2.5 doctors per 1,000
inhabitants, close to the average of the OECD member
countries, while the projections presented by the firm on
the consumption of pharmaceutical products in Mexico
are encouraging. By 2020, total spending will be slightly
above US$24 billion, compared to just over US$16 billion
spent in 2016. Although the industry is weathering a
tough period now, the future looks bright.
for Mexico. Once completed, the team will grow by 1,000
associates and in two years we will reach the 500 mark,”
says Novartis Director General, Alexis Serlin.
On the regulatory side, there is also room for optimism,
despite complaints of a snail-like pace, because
companies do see progress being made in many areas.
COFEPRIS, the national regulatory agency, has positioned
itself in recent years as one of the most influential in the
world and its international relevance is becoming more
noticeable. Its processes, essential for the development
of drugs such as generics, are slower than in other Latin
American countries but there is one distinct advantage:
the lack of price controls.
“One of the main differences is getting products into
the government healthcare system. New technology is
more easily accepted into the National Formulary in other
countries. However, Mexico enjoys price freedom. This is
a positive benefit for us because price controls and caps
in other countries have been a challenge,” says D’Elia.
Many factors come into play before launching a product,
such as initial investment, research and paperwork to
achieve the patent. According to KPMG, of every 10,000
investigated substances, only one is produced. Given this
situation COFEPRIS is working to speed up its processes.
“COFEPRIS has done a fantastic job accelerating
processes and reducing bureaucracy,” says Oscar Parra,
Managing Director of Mexico, Central America and Andes
of Lundbeck.
INCENTIVES FOR RESEARCH
Another major challenge Mexico is facing – but which
is an opportunity for Big Pharma – is that Mexicans
are living longer. A longer life expectancy gives way to
the chronic diseases that have become national health
antagonists. Part of the blame for this sits with the
country’s population, which mostly shuns prevention and
refuses to undergo periodic checkups.
Big Pharma companies, such as Janssen, have identified
this problem and are already working on solutions. “Our
vision is to have a world without disease, including
cancer,” says Mario Sturion, Director General of Janssen.
“With that mindset, we created an area for disease
interception. This looks at how we can intervene in the
pathway of the disease before it even becomes a disease.”
To this end, research and development has become a key
target area for many top pharmaceutical companies that
see Mexico has having the right mix of demographics and
economic incentive. But, again, regulations are a barrier
to what many believe should be a prosperous area.
Fuente: INEGI
PHARMA CONSUMPTION PROJECTION (US$ billions)
15
17
19
21
202020192018201720162015
15.32
16.16
17.05
17.99
18.98
20.02
5.5% compound annual growth rate
66Q: What role will personalized medicine play in
biopharma?
A: This is critical. We have been working on personalized
medicine for some years and we were one of the first to
do so in oncological treatments. For example, Erbitux is
a product approved for treating metastatic colorectal
cancer and locally advanced and recurrent metastatic
head and neck cancer. We were among the first to
implement and generate know-how of genomic testing
in colorectal cancer. Depending on the mutational
status of specific genes in a patient’s DNA, a doctor
can decide on the best treatment for that individual. It
has been interesting yet challenging because it entails
much research, education and work with physicians and
specialists.
Now, personalized medicine is part of our daily life. Many
of the products in our pipeline will also be related to
personalized medicine. Avelumab, recently approved
in the US for an aggressive form of skin cancer, will be
launched in the field of immuno-oncology.
Q: Merck is working with the Seguro Popular. To what
extent is personalized medicine widely available?
A: It is starting to be increasingly available. Metastatic
colorectal cancer was included in the Seguro Popular’s
catalogue three years ago. It has taken some time for
hospitals to get accreditation but now there are around
13-14 hospitals in Mexico that are accredited to provide
this treatment on behalf of the Seguro Popular. We expect
that very soon other catastrophic diseases like multiple
sclerosis and Turner syndrome will also be included in the
Seguro Popular catalogue to cover those patients in need.
Q: Merck operates in many areas, some highly
competitive. What is its strategy to stand out in each?
A: The structure we have implemented allows us to focus
on each business sector and especially on our patients’
needs and those of our customers. This latter point is
key to differentiating our products and services offer. We
continuously adapt our strategy to the local environment
and work closely with our team to take advantage of
existing opportunities. We have high-quality, innovative
products and a truly motivated and engaged team.
Q: How up-to-speed is regulation of personalized
medicine in Mexico?
A: There are not many challenges in the area of regulation. It
has not been a critical issue. The authorities have been open
to discussing this and to integrating personalized medicine
into treatments. It is also in the guidelines for most specialists.
Q: If regulation is not an issue, what are the main
challenges that need to be overcome?
A: The biggest challenge we face as an industry is market
access, as our innovative products must be available to
the patients who need them. Unfortunately, this situation
is not good enough at the moment and is definitely below
the international standards set for a country with the
size and population of Mexico. When compared to other
OECD countries and those in the region, Mexico has one
of the lowest access indexes, so we are working on this
through AMIIF. First we collaborated with COFEPRIS to
try to speed up the regulatory process for registration and
approval. Then, we worked with the CSG and together we
managed to improve processes. Finally, our next step will
be to work with IMSS and ISSSTE. There is limited access
to innovative products. There have been several budget
cuts, the institutions were not financially viable and they
were really struggling, but this is improving. While we
understand the issues, the country needs to push for
health to improve productivity.
Mexico’s economic situation is not that different to that of
other countries, as budget constraints are an issue all over
the world. We have been looking at alternative contracting
models and risk-sharing options, among others ideas, to
increase access to innovation.
WITHSTANDING THE TEST OF TIMEPEDRO GALVISGeneral Manager of Merck Mexico
VIEW FROM THE TOP
Merck is the oldest pharmaceutical and chemical company in
the world, founded in 1668 in Germany. It works in biopharma,
OTCs, allergen immunotherapy, high-tech chemicals and life
sciences. Merck has been present in Mexico since 1930
67
may be a lot but we continuously innovate and every year
we bring out new products and technologies. Innovation
is at Merck’s core.
Q: What role do your chemicals play in healthcare?
A: What used to be the chemical division is now the
life-sciences division. Most pharmaceutical research
companies and academia use our portfolio of over
300,000 products, reagents, lab equipment and
devices to solve the most difficult problems in the
industry. We also supply raw materials, water systems,
biopharmaceutical manufacturing systems and regulatory
advice to our most important customers. The acquisition
of Sigma Aldrich in 2015 significantly extended our
portfolio and our e-commerce platform.
Q: What will your priorities be for 2017 and for the
Mexican market?
A: We have achieved aggressive growth over the past
four years, growing at double-digit rates, which is around
three times that of the market. The challenge after four
years is to continue this growth; we are having a positive
year so far and so we hope to deliver on this expectation.
We are doing this through our core products, but we will
also launch new products in general medicine and cardio-
metabolic care. In 2017, it is vital to prepare for new
strategic launches in specialty care, such as Avelumab
in immuno-oncology and Cladribine, a new product for
multiple sclerosis.
Q: Generics have faced resistance in Mexico but
are gaining ground. What are the advantages and
disadvantages of selling a branded OTC?
A: In Mexico, generics are a large part of the Mexican
pharmaceutical market. Merck had a generics division
that was divested due to strategic reasons, but we
understand it is an option to guarantee access to some
products. However, the big issue continues to be the
quality of these products. We believe in the value of our
brands. Our growth hormone is one of several options in
the market. Ours is differentiated through the quality of
the product and because of the devices we use, such as
our electronic auto-injector that keeps track of patient
adherence and of past doses by recording the size and
time of injections. Doctors can later use this device to
know whether the patient is actually using the prescribed
dose and how often.
Q: What is the company’s strategic advantage over other
companies?
A: One of our board members once said: “We do not think
in quarters, we think in generations.” That says a lot about
the long-term approach this company takes in each of its
businesses. Compared to other companies that are more
focused on quarterly results for shareholders, for Merck,
which is mostly a family company, this has been key. We
are in each business for the long run and decisions are
not made based on immediate results but for the long
term. We say Merck is 350 years new, because 350 years
The size of Mexico's economy represents a potentially attractive market to pharmaceutical
companies, but selling to the public institutions, some of the largest purchasers, is increasingly
difficult due to budget restrictions and drug prices. With 121 million inhabitants, Mexico
is the second-biggest market in Latin America. For pharmaceuticals, however, capturing
that potential business is not always simple, especially in the public sector. Pharmaceutical
regulations are renowned for being strict in the country and to sell a drug to the public
sector it must pass three stages. First, it must be tested and approved by the regulatory body
COFEPRIS; secondly, it must be approved by the CSG, which adds it to the National Formulary;
and finally, it must be accepted onto a list of medicines by a public institution. After the third
step is accomplished, the medicine can then be sold to that particular institution. However,
institutions face shrinking budgets and an increasingly fat, sicker population, meaning
they spend less on innovative or new medicines. “In the last 18 months, Seguro Popular cut
around MX$10 billion (US$555 million) from its catastrophic fund, which is the budget for
rare diseases and other expensive diseases such as cancer, and at the same time IMSS has
not been accepting any new molecules for rare diseases in the last five years,” says David
López, Country Manager Mexico of niche pharmaceutical company BioMarin. Pharmaceutical
companies are finding other ways to do business by focusing on preventive solutions, selling
to a different segment, creating generic versions of their products or by creating solutions
so niche there are no generic or cheaper alternatives available. “Pfizer has launched its first
biosimilar, a product for rheumatoid arthritis that IMSS is providing, and we are developing
biosimilar versions of its five most-sold biotech medicines to be launched over the next four
or five years,” says Rodrigo Puga, President & Country Manager of Pfizer Mexico.
BUDGET CUTS
FORCE BIG PHARMA
TO GET CREATIVE
68Q: How does Sanofi approach patient-centric care in terms
of products and therapies?
A: We are convinced that products by themselves are not
enough. A holistic approach that includes pathology and
solutions is required. It is essential to always take into
account that beyond every product there is a patient. This
is very important in healthcare, especially with therapies for
chronic diseases. Sanofi has a broad portfolio and we are
Mexico’s number one pharmaceutical company in number of
drugs. Chronic diseases are a social concern that are related
to lifestyle, which is why we are redefining treatment.
Q: How much of Sanofi’s R&D is conducted in Mexico?
A: We have a clinical research unit here that does research for
Mexico and for some countries in the Latin American region.
Mexico plays an important role in the implementation of
Sanofi’s clinical studies and is top-of-mind when it comes to
allocating those studies. The country is among Sanofi’s top
five emerging economies and the Mexico branch ranks 10th
among all global subsidiaries. Today, there are more than
35 active phase III and IV studies in Mexico. The country is
one of Sanofi’s most important clinical research units for
emerging countries. We also have a program with the Aspen
Institute and UNAM that is focused on native research, in
which we sponsor research by local professionals who are
venturing into projects focused on local needs.
Q: What pharma-economic solutions can you offer the
market to provide more access to innovative therapies?
A: We developed a monoclonal antibody to treat cholesterol.
This innovative therapy is more efficient than statins, which
are the usual treatment provided by public institutions.
Patients treated with statins are still prone to heart attacks,
which in the end will be more expensive than any therapy.
We are seeing this purchasing behavior start to change and
we hope that decisions begin to target innovation. We can
provide patients with a solution that can return them to an
active lifestyle, especially those with conditions like multiple
sclerosis. An oral therapy might be cheaper than our solution
but it causes more hospitalizations and is more expensive
over the course of a lifetime, while an innovative solution will
result in expenditures for only three years. We have patients
who were treated with our therapies 20 years ago and have
not needed further treatments, although we continue to
follow their progress and symptoms. There is an opening in
the healthcare system to include more innovative drugs but
we must accelerate the process for chronic diseases. Many of
our products are already included in the public system but we
need to provide access to high-tech products and treatments.
Q: How does Sanofi provide healthcare professionals with
access to innovation and how does that talent benefit the
company?
A: We offer a continuous education platform (PAEC) that
is the result of a cooperation agreement between Sanofi
and the Ministry of Health. Many Ministry of Health doctors
are certified in the programs offered through this platform.
For example, we offer certification for treating diabetes. We
do not promote any of our brands through this platform
because our main objective is to increase the number of
trained doctors. We have certified around 16,000 doctors
through PAEC in just three years. There are about 14,500
family doctors actively participating in the platform. We
want to continue developing talent in Mexico and we
want to increase our team’s diversity. We are interested in
nurturing talent in indigenous communities and we have
developed a scholarship that helps train that talent. We
also want to export talent from Mexico to Sanofi’s global
subsidiaries.
Q: What are Sanofi’s priorities in Mexico?
A: We want to continue redefining health for Mexican
patients, which means making the most of all the
opportunities we have to promote significant change in
patient health through the private or public sectors with
innovation in drugs, training, support for doctors and
through scientific research. For us it is important to bring
Sanofi’s global innovation to Mexico.
INNOVATION A KEY TO PATIENT-CENTRIC CARE FÉLIX SCOTTDirector General and Country Chair of Sanofi
VIEW FROM THE TOP
Sanofi is a pharmaceutical group founded in 2004 after the
merger of Sanofi-Sythelabó and Aventis. It is the world’s
third-largest pharmaceutical group and a leader in research in
Mexico with over 35 active studies
69Aspen has bought from other labs have allowed us to revive
products well known by doctors.
Q: What were the reasons for which 2016 was a difficult
year for the industry?
A: There was a lack of innovation in 2016. Innovation in the
industry often causes products for high specialty needs
to become increasingly expensive, but we have not seen
important advances in the health sector in accessibility.
In the private sector, access has been effective in lowering
the cost and prices for patients. At the same time, it has
shifted market dominance from manufacturers and the
main providers of the sector to commercialization and
sale points. We are seeing changes in the way clients are
approached, client convenience and of course access at
better prices. This means the industry that did not adapt
to this new model has run into problems. In Mexico, there
are no instruments to evaluate with certainty the value of
the public market. We have information from some of the
big institutions, but not an overall picture.
Q: To what extent do you plan on further expanding from
your two existing plants? What other ambitions do you
have for Mexico?
A: Over the next three or five years, we plan on further
expanding our manufacturing capacity in Mexico in the
pharmaceutical segment. In 2017, we will transfer products
to be manufactured in our Vallejo plant and we will export
them globally.
Commercially, we are launching several products that
will satisfy market opportunities we have detected, more
specifically in pharmaceutical combinations. In the nutrition
segment we will continue to innovate with new formulas
and we will launch a new product.
Q: What makes Aspen Labs stand out from other companies
in the industry in Mexico? What is its main added-value?
A: Our business model is different from that of a typical Big
Pharma company. Big Pharma companies carry out R&D,
through which they offer innovative products for certain
pathologies. In Aspen’s pharma business we do not carry
out R&D. What we do is buy products or brands that other
companies no longer want to invest in. In this way, we can
keep costs at an accessible level for patients because we
do not experience pressure to reinvest in these areas. Of
course, we are a public company listed on the Johannesburg
Stock Exchange and release our financial results.
For example, the Infacare formula was developed in South
Africa and we transferred that technology to our facilities in
Vallejo, Mexico City. As that plant produces for Mexico, Latin
America and we are beginning to produce for Australia and
the US, the additional volume added to that plant helps
us reduce our costs. This means we can offer high quality
products to Mexican patients.
Q: What growth have you seen in 2016 and what internal
and external factors are the drivers of this?
A: In 2016, the Mexican health industry saw one of its
toughest years. In that year it achieved single digit growth
in terms of value due to the introduction of new products
and price increases. At Aspen, we are seeing growth at
twice the audited market growth.
Our pharma business is witnessing healthy organic growth
in both private and public sectors. This is driven by our lines
in thrombosis, hormones and cytokines for women’s health
and men’s health.
In addition, we have a line of products that are traditionally
used in the public sector and that were not taken privately
in the past, such as our low weight molecular heparin. Since
the end of 2015, we have been taking this product to the
private sector, where it has been well received. We have also
launched Fondaparinux, a product used in the ER when a
patient has a heart attack and needs products like this one
immediately to avoid complications. Other mature brands
CAST-OFFS PROVIDE OPPORTUNITY, BENEFIT
RAÚL CAMARENAGeneral Manager of Aspen Labs Mexico
VIEW FROM THE TOP
Aspen Labs is a South African pharmaceutical company, the
largest listed on the Johannesburg Stock Exchange. Present in
over 150 countries, it specializes in OTCs, infant nutrition, male
and female health and cardiology
70Q: Generic medicines are becoming more popular in
Mexico and innovator patents are expiring. What is Pfizer’s
strategy to deal with this?
A: Access to health services is an important challenge.
Mexico spends 6 percent of its GDP on health, the lowest
expenditure of all OECD member countries, as others spend
an average of 9 percent on health. Pfizer has launched its
first biosimilar, a product for rheumatoid arthritis that IMSS
is providing, and we are developing biosimilar versions of
its five most-sold biotech medicines to be launched over
the next four or five years. Pfizer’s strategy is to participate
in attractive segments and to target growth above the
market rate. To achieve that goal, we must compete in
innovation. The company has 90 projects globally and over
US$7 billion invested in R&D. It also has a business base of
patent-expired drugs that are still successful due to our
quality prestige. We are successful in emerging markets
because, although regulations have improved, physicians
and patients do not trust all generics. However, we have also
launched a generics line, a segment in which Pfizer enjoys
an average growth of 35 to 40 percent annually.
Q: On what pathologies is your pipeline going to focus?
A: The five main areas in which Pfizer is working are oncology,
central nervous system, cardiovascular, rare diseases and
biosimilar drugs. It is hard to say where the best results will
be, because out of every 100 projects that start in the clinical
phase, only one will reach the market. We invest about US$7-8
billion per year and launch one or two new products per year.
Q: What is Pfizer’s strategy to sell innovative drugs to the
Mexican public sector?
A: The arthritis biotech product Pfizer introduced to IMSS
already existed and we developed the biosimilar version. In
innovators, the challenge is showing public health institutions
the cost/effectiveness ratio of products, starting with the CSG,
IMSS, ISSSTE and decentralized agencies. A new drug has a
patent with 15 years of exclusivity from when the molecule
is discovered. It takes eight to 10 years to gain approval and
introduce the drug into a market and in Mexico four to five
years for the product to be available to the public sector.
Q: What is Pfizer’s approach to personalized medicine?
A: Pfizer already has some personalized products in the
market; for example, our therapy for patients with ALK-
positive non-small cell lung cancer. In immunotherapy,
especially oncology, the objective is to strengthen the
immune system to combat cancer. Most cancer treatments
use biological and chemical compounds but this Pfizer
treatment could help the immune system target tumor
cells directly. In oncology, it is difficult to decide when to
launch a product because it does not follow the same cycle
as other products. Pfizer’s acquisition of Medivation will
enable us to strengthen our clinical research into prostate,
breast and blood cancer.
Q: What are Pfizer Mexico’s priorities for the rest of 2017
and 2018?
A: Along with Brazil, Pfizer Mexico is a priority subsidiary.
Pfizer Mexico’s commercial objective is growing above the
market growth of 5 percent. The company will continue
launching innovative medicines, biosimilars and high-quality
generics. We want to continue working closely with AMIIF
to demonstrate that investing in health is one of the best
investments in terms of economic impact. We also want to
work on innovative access strategies.
Pfizer Mexico will also continue innovating in clinical
research. With 121 million inhabitants, excellent professionals
and a decent level of infrastructure, there should be much
more clinical research in Mexico. This does not happen
because administrative processes and institutions delay
procedures more than they should. The company has
over 400 research centers in Mexico, although it is still an
incipient process. According to AMIIF, Mexico could be
looking at a US$500 million investment in clinical research
in the near future. Pfizer will invest US$16 million in Mexico
in research in 2017.
DIVERSE PORTFOLIO ENSURES GROWTHRODRIGO PUGAPresident and Country Manager of Pfizer Mexico
VIEW FROM THE TOP
Pfizer is a US-based global pharmaceutical company present
in over 180 countries with a strong research focus. It works in a
variety of therapeutic areas including oncology, cardiovascular
health, vaccines, ophthalmology and infectious diseases
71
INSIGHT
drugs will play a role in this, leading cancer to become
more of a chronic disease.”
To work on prevention, Janssen collects statistics
through its website from volunteer patients. “For Mexican
healthcare, prevention is still a hope but it is a challenging
area to move in. The actions, resources, programs and
initiatives are still limited across the country,” he says. In
this sense, the company is also working on a solution for
treatment-resistant depression, the stage of the disease
when people begin to have suicidal thoughts.
In Mexico alone, there are more than 6,400 suicides
each year, according to INEGI 2015 figures, many of
which result from untreated or poorly treated major
depression. “There is a critical need for drugs that can
interrupt the thought processes that can lead to suicide
in patients with severe depression, particularly as most
current antidepressants can take weeks to have an effect.
This drug blocks the neuro-transmissions and the effects
are unbelievable,” says Sturion. The WHO estimates that
depression affects 322 million people globally as of 2017.
It is the first cause of disability and is a factor in suicide.
In addition, Janssen is making strides in HIV treatment. “We
produce an inhibitor called EVIPLERA for HIV patients and we
have developed a booster, PREZCOBIX, to optimize results in
patients. It will be launched in 2017,” says Sturion, adding that
“the company is also working on the development of an HIV
vaccine that has shown promising results in primates in phase
I trials, potentially ready in a six to seven-year time frame.”
Mexico has a clear and impactful chronic disease problem
caused, among other reasons, by the lack of prevention at
primary-level care. Many are afraid to go for check-ups in
case a problem is discovered, thus worsening conditions.
There are also those that refuse to believe they are ill, shown
clearly in the results of the 2016 ENSANUT survey. Better
prevention and early detection is key to changing this
panorama, something Janssen, the pharmaceutical division
of US behemoth Johnson & Johnson, is working on.
The company is also focusing on innovation to stop
diseases in their tracks and prevent patients from
reaching critical stages. “Our vision is to have a world
without disease, including cancer. With that mindset,
we created an area for disease interception. This looks
at how we can intervene in the pathway of the disease
before it even becomes a disease,” says Mario Sturion,
Director General of Janssen. “There are many studies
that show that the best investment is in prevention.
However, preventive solutions are still in phases that
include nutrition, sports and moving around but there
are no solutions developed to test populations at risk
of developing diabetes during pregnancy. If detected
and treated in a timely manner, this problem will never
develop. It is too early to estimate the full impact, but it
will be huge. It will be a game changer.”
Prostate cancer, one of the areas Janssen is working on,
is the most common cancer diagnosed in men in Mexico,
accounting for 6,152 deaths in 2014, 13.8 percent of all
male cancer deaths in Mexico, according to the WHO.
That supports the importance of early diagnosis for this
disease: when diagnosed in local and regional stages, the
survival rate is almost 100 percent, which plummets to 28
percent when detected in distant stages, according to data
from the American Cancer Association.
“In prostate cancer, there is also a new treatment that will
be launched in one to two years. We believe it should be
prioritized at the same level as breast cancer, because
prostate is the second cause of death among adult
males,” says Sturion. “Genomics and immuno-oncology
GAME CHANGER: STOP DISEASE IN ITS TRACKS
MARIO STURIONDirector General of Janssen Mexico
Prostate cancer killed 6,152 men in 2014 in Mexico, 13.8 percent of all male cancer deaths
72Q: What challenges do transnational companies face in the
Mexican market?
A: Overall, market access poses challenges and question
marks for all players. We are a heavily regulated industry
and even more so due to our internal compliance with
government policies. In Mexico and Latin America, our time
to market for drugs is getting slower and our capability as a
transnational company versus local players at times cannot
be compared.
Registration for market authorization for new products is one
of the hardest hurdles to comply with for many companies,
especially for innovative drugs and therapies, even considering
that the authorities have simplified processes and timeframes.
Unfortunately, we have examples of novel drugs that have
been in the registration process for almost six years and
there is still no answer as to when market authorization will
be granted. This obviously generates financial and business
forecasting issues for us, plus big questions from our partners
in Europe trying to understand the situation.
Q: How are your sales divided between the government and
private sector?
A: Of our overall business, 45 percent relies on government
sales, consolidated purchases from the main health
institutions and some decentralized organizations that are
also within our business scope. This 45 percent is divided
between two branches: oncological drugs for lung and
breast cancer and Fabroven®, indicated for patients with
venous insufficiency.
The retail market drives 55 percent of our business, with our
franchise products in women’s health. Navelbine Oral and
Fabroven® are our top-selling and most prescribed products
in the Mexican market. They will continue to grow in the
institutional segments as well as in the retail market because
they have strong active promotion, investment and medical
and scientific fundamentals.
Q: How have public sector budget cuts affected your business
over the past year?
A: The pharmaceutical industry in Mexico has been impacted
in different ways from the budget cuts and constraints in
the public health sector. In our case, the impact has lacked
strength because our marketed products, such as Navelbine
Oral, are targeted at patients with lung cancer and breast
cancer, both considered top national health concerns
regarding treatment priorities in Mexico.
We are fully aware that the operational and financial
strategy of the authorities should be to lower the fixed
costs of institutions, which is the reason there is a strong
movement in Mexico to substitute innovative drugs with
generic forms.
Fortunately, our generic exposure is still limited in our
various therapeutic segments. We agree absolutely on
the need of generics in the market to make medicine
more accessible to the whole population because we
fully understand that a healthy population creates a more
productive country. But there should be an examination
of whether transnational and national companies are
competing on a level playing field, because that is not
the case in some locations.
Q: What new products has Pierre Fabre launched in the
past year?
A: Through a joint venture effort with Ferring
Pharmaceuticals, we obtained a license agreement and
distribution rights for Lysteda, a prescription product
indicated for patients with excessive menstrual bleeding
conditions. Lysteda is a key product that strongly
contributes to enhancing our women’s health portfolio.
Lysteda has been on the market for over a year and a
half and has seen great acceptance among our medical
community and patients. This development represents
an interesting approach for us because we are marketing
it as a training product for physicians and use the same
traditional sales channels as wholesalers do.
We also produce an orphan drug called Busilvex, used to
support bone marrow transplants. This is a one-of-a-kind
CHALLENGES IN THE FACE OF A CHANGING MARKETKAREL FUCIKOVSKYDirector General of Pierre Fabre Médicament LATAM
VIEW FROM THE TOP
73
A: Worldwide, mature products are our bread and butter.
They allow us to continue investing in R&D globally and
to power ourselves in joint ventures locally.
As an example of this, Pierre Fabre has signed a worldwide
agreement with Array Pharma, a big pharmaceutical
company, for the co-investment and development of two
molecules for melanoma and colon cancer.
Q: What are your expectations for the next five years?
A: We will continue to focus on our portfolio management
strategy, based on specific therapeutic areas: stay strong
in oncology, be a fundamental player in the women's
health market and grow in dermatology and oral care.
We will continue to enhance partnerships worldwide
and as an example of this, five months ago, we signed a
licensing and distribution deal with Grupo Biotoscana, a
strong and respected pharmaceutical company in Latin
America, for Navelbine Oral and our full oncology portfolio.
In our five-year strategic plan, we will focus on portfolio
management and a solid arm of our development will
be looking for strategic alliances. We have seen in
Mexico, Argentina and Brazil that many transnational
companies are suffering due to divestment strategies
on their mature portfolios. They have focused on high-
end technology and biotechnology products without
considering access barriers and the low rates of payers.
Now, some of these big companies are realizing they are
losing out but lack the resources to revive their mature
products that still have strong brand equity. We have
grasped these opportunities and started partnering with
some companies. We have been working with Janssen for
the past three years on part of its gynecology line, with
positive results for both companies.
product in Mexico, as it is the only drug available in IV form.
Busilvex has been on the market for five and a half years
and even though it does not represent large volumes for
our business it does makes a big difference in the way
procedures are managed by professionals, especially when
considering that patients need an exact quantity of product
present in their bodies to be prepared for a procedure.
Busilvex is not at the core of our business strategy, but
surely represents an opportunity to support our oncology
franchise development. I do not think the company will
migrate to an orphan drugs business model. It will be
much more oriented toward oncology, women’s health
and dermatology.
Q: What difficulties have you faced getting an orphan
drug registered in Mexico?
A: Orphan drugs have different registration processes and
“go to market” possibilities than conventional medicines.
Perhaps the registration pathway for orphan drugs could
provide faster market entry but the medication must still
meet all regulatory requirements.
Q: What challenges do transnational companies face in
the Mexican market?
A: Overall, market access poses challenges and question
marks for all players, be they national or transnational
companies, public or private. The pharmaceutical sector
is a heavily regulated industry, and even more so due to
internal compliance policies, which differ on a company
to company basis. In Mexico and Latin America, our time
to market for drugs is slowing and our ability to compete
as a transnational company versus local players at times
cannot be compared.
Registration for market authorization for new products
is one of the hardest regulatory hurdles to comply with
for many companies, especially in regards to innovative
drugs and therapies, even considering that there have
been huge improvements from our authorities and that
we are on the right path to simplifying proccesses and
time frames.
Unfortunately, we have novel drugs that have been in the
registration process for almost six years and still have no
definite answer as to when the marketing authorization
will be granted. This obviously generates financial and
business forecasting issues for us, plus big questions
from our partners in Europe trying to understand our
authorities’ processes and timeframes as we have
invested a lot of money in those products.
Q: How can your company sustain growth while relying
only on mature products?
Pierre Fabre is the third largest French pharmaceutical laboratory.
It has two main lines of business: Pierre Fabre Médicament, which
focuses on the pharmaceutical sector, and Pierre Fabre Dermo-
Cosmetics, related to dermatology and cosmetology
Mature products allow us to continue investing in R&D globally and to power ourselves in joint ventures locally
75
WHAT ARE THE GREATEST CHALLENGES PHARMACEUTICAL COMPANIES FACE?
KAREL FUCIKOVSKYDirector General of Pierre Fabre Médicament LATAM
VINCENZO D’ELIA Director General of Alfa Wassermann
PEDRO GALVISGeneral Manager of Merck Mexico
ROUNDTABLE
Overall, market access poses challenges and question marks for all players. We are
a heavily regulated industry and even more so due to our internal compliance with
government policies. In Mexico and Latin America, our time to market for drugs is getting
slower and our capability as a transnational company versus local players at times
cannot be compared. Registration for market authorization for new products is one of
the hardest hurdles to comply with for many companies, especially for innovative drugs
and therapies, even considering that the authorities have simplified processes and time
frames. Unfortunately, we have examples of novel drugs that have been in the registration
process for almost six years and there is still no answer as to when market authorization
will be granted. This obviously generates financial and business forecasting issues for
us, plus big questions from our partners in Europe trying to understand the situation.
We have seen significant currency devaluation, so the cost to import products
and our operational costs have increased. There are many services we have to
cover in foreign currencies. In some cases, we have to take the loss, but we must
also reduce and relocate resources. For example, if for next year we had three
projects planned, we should only go ahead with two. I remember reading a report
from a financial expert saying the value of the dollar would reach 30 pesos per
dollar. The international environment is not friendly right now and it presents
many challenges. Companies like ours have to be selective when investing and
focus on finding returns. There is a tremendous opportunity for local companies
that can be more aggressive and gain market share.
The biggest challenge we face as an industry is market access, as our innovative products
must be available to the patients who need them. Unfortunately, this situation is not good
enough at the moment and is below international standards set for a country with the
size and population of Mexico. When compared to other OECD countries and those in the
region, Mexico has one of the lowest access indexes, so we are working on this through
AMIIF. There have also been several budget cuts, the institutions were not financially
viable and they were really struggling, but this is improving. While we understand the
issues, the country needs to push for health to improve productivity. Mexico’s economic
situation is not that different to that of other countries, as budget constraints are an
issue all over the world. We have been looking at alternative contracting models and
risk-sharing options among others ideas to increase access to innovation.
In addition to the general challenges companies have
faced last year, such as fluctuating exchange rates and
insecurity, Big Pharma has seen revenues dip as both
consumers and top national and international politicians
assail the industry’s pricing methods and as patented
products come under attack from a growing generics
market. Mexico Health Review asked several relevant
players what, in their opinion, have been the greatest
challenges for the pharmaceutical industry between 2016
and 2017.
76Q: Novartis has implemented a patient-centric focus. What
impact has this had on access to healthcare?
A: This strategy has had a great impact. We are focusing
more on improving our patients’ outcomes by helping
institutions measure results and apply effective solutions,
which gives us a competitive advantage. AMIIF and IMSS
are also launching a project to prioritize a group of critical
diseases in which they create rules so that the different
companies offer shared-risk models that can provide access
to innovations.
Q: Novartis has a 2015-2020 investment plan for Mexico.
So far, how has it been allocated?
A: This plan was established in agreement with the
Ministry of Health and the Ministry of Economy and it has
five pillars to accomplish over five years. One is a US$50
million investment in clinical research in five years. Another
pillar is the creation of a Novartis Center of Operations for
Latin America here in Mexico to support all the companies
from the group and their divisions. This project is a great
opportunity for Mexico. Once completed, the team will grow
by 1,000 associates.
Q: What are Novartis Pharma’s main therapeutic areas and
how is the company targeting them?
A: We have six priority areas. The first is oncology, for
which we recently submitted to COFEPRIS a product
for monastic breast cancer that will produce disruptive
results for the management of this disease. Second, is
the cardiovascular and metabolic health segment. In
2016, we launched a product for cardiac failure that
has shown a significant reduction in mortality and
hospitalization due to this condition, which is the main
cause for hospitalization in IMSS for adults over the age
of 65. Next is immune dermatology and also in 2016 we
launched products for psoriasis rheumatology, psoriatic
arthritis and ankylosing spondylitis. We also have an area
for respiratory conditions focused on chronic obstructive
pulmonary disease, for which we have developed a
product with a new action mechanism that has been
recognized as new paradigm in the treatment of this
disease. Our fifth priority area is neuroscience. We are
focused on multiple sclerosis but we also have treatments
for Alzheimer’s, epilepsy and Parkinson’s. Finally, we have
a portfolio for problems related to both the back and
front of the eye.
We always aim to match our portfolio to the main Mexican
health concerns. Diabetes is among the diseases that
IMSS is currently prioritizing and we have a product to
manage diabetes that is supported by the largest study
done among Mexican patients. We also develop solutions
for diabetic macular edema and diabetic retinopathies
and we have the market’s most integral portfolio for
transplants.
Q: What is the strategic balance between providing the
government with access to innovative medicine and
developing generics?
A: Novartis is one of the top three global companies for
innovative and generic medicine. In terms of generics,
we believe we must respect patents, but once a
patent expires we have quality generics that open new
possibilities and reduce expenditure and that could be
used by the system to create new innovations. It is very
important that the population has access to all new
products. However, the challenge in Mexico is that the
investment in health is low: it is 6 percent, while the
average government investment in health among OECD
countries is 9 percent. Poor investment limits the capacity
to acquire new technology but we recognize that we are
at a moment in history where the development of drugs
has advanced. Therefore, in an environment of budget
constraints, we have a responsibility to help institutions
gain access to these products. We do this by introducing
pharma economic models. The role of the pharmaceutical
industry should transform from being just a seller to
becoming a partner of the health system.
WORKING TOGETHER TO IMPROVE PATIENT HEALTHALEXIS SERLINDirector General of Novartis
VIEW FROM THE TOP
Novartis is a global pharmaceutical and biotechnological
company with a history that spans over 200 years. The
company’s three main divisions are Novartis Pharma, for
innovative medicine, Novartis Oncology and Novartis Eye Care
77
PHARMACEUTICAL DEALS COMPLETED IN 3Q16 THROUGH 2Q17 OVER US$1 BILLION
In addition to the big names and deals,
investment in younger companies in life sciences
continued, with the top 10 venture capital rounds
in 2016 reaching a combined value of US$1.9
billion. One of the most notable is BlueRock
Therapeutics’ Series A Round, which raised US$225 million
in December 2016 from investors Bayer and Versant Ventures,
a biotechnology investment firm. BlueRock Therapeutics will
initially focus on pluripotent stem-cell treatments.
Global M&A activity in the pharmaceuticals sector has been
slow in the first months of 2017 and the second half of
2016, according to FiercePharma. Although many experts
predicted a pick-up in M&A activity in 2017, FiercePharma
reports that this is yet to materialize. Only 12 deals
surpassed the US$1 billion mark in the year from 3Q16
through 2Q17, compared with 16 in the same period a year
earlier. But the combined value totaled US$138.7 billion,
surpassing the US$120.3 value of the deals negotiated in
3Q15 through 2Q16.
There were two large deals completed that together account
for just over 50 percent of the value of all deals over US$1
billion, the largest of which went through in August 2016
when Teva Pharmaceuticals acquired Actavis. “Through our
acquisition of Actavis Generics, we are creating a new Teva
with a strong foundation, significantly enhanced financial
profile and more diversified revenue sources and profit
streams backed by strong product development engines.
This is a platform that is expected to generate multi-year
top-line and bottom-line growth as well as significant cash
flow,” said Erez Vigodman, President and CEO of Teva in
a press release.
A second deal also hit the US$30 billion mark when
Johnson & Johnson completed the acquisition of
Actelion in June 2017. In a company press release, J&J
announced that it expected the deal to provide value
to Actelion shareholders, extend the geographical and
commercial reach of its products while also enhancing
value for Johnson & Johnson shareholders. It will be
spun off into an R&D unit based in Switzerland that “will
have a broad portfolio of drug candidates in clinical
development across four focused therapeutic franchises:
specialty cardiovascular disorders, central nervous system
disorders, immunological disorders and orphan diseases,”
the company said in its release.
KPMG reports that oncology is a particular area of interest
for companies within the biotech sector and it expects
three of the top five selling drugs in 2017 to belong to the
sector. EvaluatePharma reports that oncology was the
top-grossing therapeutic area in 2016 with global sales
of US$93.7 billion.
ANALYSIS
M&A activity in the pharmaceutical sector has continued over
the past year, despite global fears of a slowdown due to US
elections. The combined value of deals over US$1 billion in
3Q16-2Q17 topped that of the previous year
0 10 20 30 40 50 60 70
Allergan/Kythera
Mallinckrodt /Therakos
Valeant/Sprout Pharmaceuticals
Lannett/Kremers Urban Pharmaceuticals
Concordia Healthcare/Amdipharm Mercury
Teva/Rimsa
Pfizer/Anacor
Abbvie/Stemcentrx
AstraZeneca/ZS Pharma
Merck/Sigma-Aldrich
AstraZeneca/Acerta Pharma
Shire/Dyax
Shire/Baxalta
Celgene/Receptos
Endo International/Par Pharmaceutical
Pfizer/Hospira
Galenica/Relypsa
Allergan/Tobira Therapuetics
New Huadu Industrial Group/Yunnan Baiyao Holding
Quintiles/IMS Health
Mylan/Meda
Teva/Actavis Generics
Allergan/LifeCell Corporatain
Pfizer/Medivation
Johnson & Johnson/Actelion
Sanofi/Boehringer Ingelheim
Takeda/ARRIAD Pharmaceuticals
Fresenius Helios/Quironsalud
in 3Q15 through 2Q16
in 3Q16 through 2Q17
PHARMACEUTICAL DEALS COMPLETED OVER US$1 BILLION (US$ billions)
Sources: PwC, FiercePharma, KPMG
� Acquisition
� Asset Swap
� Merger
� Mixed Ownership
� Bought 55% Share
78Q: How prevalent is depression in Mexico and to what
extent is it on the rise?
A: The prevalence of depression and other mental diseases
should be very similar in Mexico as in the rest of the
world. I do not think the number of cases has increased.
The question is whether more cases have been detected.
There is a large number of people who will get some sort of
mental disorder at some point in their life and the concern
is whether or not doctors are diagnosing them.
The world is becoming more aware of mental health and
within 10 years depression will be the most debilitating
disease, more than diabetes or heart conditions. One
reason is that depression strongly impacts productivity,
firstly due to absenteeism from work but also because of a
new concept called presentism whereby people go to work
but do not perform. They sit at their desk, unable to make
decisions or perform their work effectively.
Additionally, in the case of mental diseases, the economy
not only loses the person who is mentally impaired but
also the family member who leaves their job to take
care of this person. The annual cost of mental illness in
Europe is pegged at €798 billion. In Mexico awareness is
improving and for the first time there is a working group in
the legislative body looking at mental diseases.
Q: In 2016, the Table of Work-Related Diseases was
updated to include stress and other mental afflictions.
How does this impact awareness?
A: There is more and more information available on
mental diseases and the government, health authorities
and companies are realizing this is a big issue. We are
hearing about it more now than a few years ago because
it is something we cannot hide. Recently during a visit to
Mexico by the Danish Minister of Health, data was presented
Lundbeck is a Denmark-based Big Pharma focused on
researching and developing solutions for neurological and
psychiatric conditions that affect people of all ages, such as
depression, schizophrenia and dementia
regarding patients with depression. The results showed that
patients were first treated for depression 10 years after they
first showed symptoms. Those treated earlier were able to
recover more easily while for others the disease became
more complex. The Danish and Mexican authorities have
agreed to work together and exchange perspectives on
mental health issues. The Danish government is promoting
grants for Danish researchers to conduct research in Mexico,
generally in collaboration with Mexican researchers.
There are more people that at some point in their life
suffer an episode of depression than any other mental
disease. However, in Mexico there are many patients with
Alzheimer’s, Parkinson’s and schizophrenia, which is a very
difficult disease and patients are rarely understood.
Q: How does the demography of these diseases in Mexico
compare to that of other Latin American countries?
A: Latin America is moving in the same direction. We
are shifting from infectious disease to chronic diseases.
Before, bacteria caused illnesses but now diabetes, cancer,
depression and coronary diseases are more prevalent.
Mexico is a young country and the main driver for growth
is its large population. Therefore, it is important that all
decision-makers in this country realize that the young
population needs to be healthy to be productive.
Q: How can companies work with the public sector to
prevent the young population becoming unhealthy?
A: First, we need to understand the issue before we fix it. For
example, diabetes has been quite well researched and now
the authorities are doing something about it. We have fallen
behind in other areas and we need to calculate the impact
of mental disease. I think getting data on how many people
are absent from work due to depression would be quite
interesting and would help to understand the magnitude of
the impact these diseases have on the economy.
Q: What are the main risk factors for mental disease? How
much do environmental factors influence this?
A: Urbanization and depression go hand in hand. As an
economy develops, the population is weighed down
MENTAL DISEASES: UNDERSTANDING AND PREVENTIONOSCAR PARRAManaging Director of Mexico, Central America and Andes of Lundbeck
VIEW FROM THE TOP
79
Q: What programs are in place in Mexico to help with this?
A: There are some support programs for specific population
segments with high suicide rates such as HIV patients,
alcoholics and drug addicts. One of the main issues with
depression is that a large number of the people who suffer
from it commit suicide. If you think mental illness does not
kill, it does.
Q: Which state of the art products has Lundbeck recently
launched?
A: We launched an anti-depressant last year that is creating
a completely new way to treat the disease. It is called
Brintellix and it not only targets the feeling of depression but
also the way we think when we are depressed. Depression
not only affects a patient’s mood but also their cognitive
abilities, which prevents them from being as productive as
they could be.
Also, next year we will launch a product called Nuvigil for
excessive sleepiness. It helps patients stay awake during the
day and when it wears off they can go to sleep. It also works
for people who want to regulate sleep patterns, such as
shift workers. This new product will have a broader range of
efficiency so patients will not only be awake but more alert. In
2018, we will market a product for schizophrenia. These will be
our new products for the next three years. Lundbeck Mexico
will be the central hub for Central America and the Andes so
we are excited about the opportunities our industry has here.
Q: How do COFEPRIS’ regulations differ to those of the
FDA or EMA?
A: COFEPRIS has done a fantastic job accelerating the
processes and reducing bureaucracy. There are many
differences from the other organizations. For instance in
Europe you do not need to do local releases by repeating
clinical testing.
with heavier workloads, we spend more time in traffic
and we produce more pollution, all of which are stress
factors that can lead to depression. There is a correlation
between economic development and the development
of depression. There are other risk factors for specific
diseases.
Q: What percentage of sufferers are diagnosed and what
percentage of those receive treatment?
A: In general, you see more diagnoses in places like Europe,
the US and Canada, and less in Asia, Latin America and
Africa. In Mexico, the likelihood of being diagnosed when
going to a psychiatrist is extremely high and almost 100
percent of the patients that are diagnosed by a psychiatrist
are treated, but few people go to a psychiatrist. The
majority go to a general physician (GP) and so the process
for diagnosis and treatment could be lengthier.
Visiting a psychiatrist is a big step for many people
because mental disease sufferers are more prone to
stigmatization. For example, schizophrenia is a difficult
condition to talk about because it falls out of the common
and many people think of depression as a weakness. Many
do not recognize depression and tell sufferers to stay
calm and go to work, but this is not the right way to deal
with it. In the first two weeks, depression is just a feeling
but after two or three weeks it becomes a biological
problem. The neurotransmitters in the brain start working
differently because the body is adapting to a condition.
Q: Which demographic suffers the most from depression?
A: There is a high prevalence of depression in older people
but it is also common in the younger population aged late 20s
to 50s. It is becoming more frequent in teenagers and this is
troubling because young people should not be depressed yet
suicide in the younger population is on the rise.
80Q: Alfa Wassermann had plans to expand its gastroenterology
portfolio. How far along are you?
A: We have invested in product registration in this field but
we are a little behind schedule. COFEPRIS processes are
taking longer than we expected. In our opinion, in some
cases it is requesting more information than described in
norms. Perhaps it is trying to show a stricter profile than
the FDA. Nonetheless, we are continuing with our plan
to launch three products for gastroenterology in 2017.
Q: In the wake of the Teva-Rimsa deal, what is the appetite
for M&A in Mexico?
A: It has become a little more difficult to find M&A
opportunities due to prices. After the price Teva paid to
acquire RIMSA, many now have lofty price aspirations. But
we will keep looking for other business opportunities.
Worldwide, Alfa Wassermann is expected to expand
its presence through smart and focused geographic
investments. There is no question the pharmaceutical
sector continues to face multiple challenges on many fronts.
Despite this short-term uncertainty, I believe Mexico’s
economy in the medium and long term will do fine.
Q: Has peso depreciation affected your operations?
A: We have seen significant currency devaluation so the
cost to import products and our operational costs have
increased. There are many services we have to cover in
foreign currencies. In some cases we have to take the
loss, but we must also reduce and relocate resources. For
example, if for next year we had three projects planned, we
should only go ahead with two.
I remember reading a report from a financial expert saying
the value of the dollar would reach MX$30 per dollar. The
international environment is not friendly right now and it
presents many challenges. Companies like ours have to be
selective when investing and focus on finding returns. There
is a tremendous opportunity for local companies that can
be more aggressive and gain market share.
Q: How do government tender processes affect an
international company?
A: We do not sell to the government. It has been a
challenge for international companies to enter the National
Formulary and being accepted by IMSS and ISSSTE is a
long process. People that come to Mexico have to plan
for the long haul if they want to be in that business. It
is difficult to have access and frankly for the next two
years we do not foresee a positive environment because of
the budget cuts in healthcare. Evidently, the government
has no funds to get new technology. It is going to be
a challenge to get access to the government without a
generics division.
Q: How does the Mexican market differ from other Latin
American markets?
A: One of the main differences is getting products into
the government healthcare system. New technology
is more easily accepted into the National Formulary in
others countries than in Mexico. Also, the generics market
in other countries is more stable. Here it is too young and
is still growing. However, Mexico enjoys price freedom.
This is a positive benefit for us because price controls and
caps in other countries have been a challenge. Here, we
are also experiencing new models like those of Farmacias
Similares and Genoma Lab, which I have not seen in other
countries.
Q: What are your short-term ambitions for Mexico?
A: Our goal is to consolidate our presence here and ensure
we become a well-positionned company. We will continue
in gastroenterology, in deep venous diseases and in new
therapeutic areas. We bought a company in Italy that has a
large cardio metabolic portfolio, which we will assess after
the merger is completed. I continue to see Mexico as a long-
term opportunity. We must stay open-minded and keep an
eye open for new chances.
WAITING FOR NEW OPPORTUNITIESVINCENZO D’ELIADirector General of Alfa Wassermann
VIEW FROM THE TOP
Alfa Wassermann is an Italian Big Pharma company focused
on R&D for a population that is living longer thanks to medical
advances. The company’s strategy is based on three guidelines:
research, technology and internationalization
81
INSIGHT
disease treatments, while another 40 percent rely on the
Seguro Popular. However, public institutions are sometimes
reluctant to spend a large portion of their ever-shrinking
budgets on drugs that will treat very few patients. “In the
last 18 months, Seguro Popular cut around MX$10 billion
(US$555 million) from its catastrophic fund, which is the
budget for rare diseases and other expensive afflictions
such as cancer. At the same time, IMSS has not accepted
any new molecule for rare diseases in the last five years,”
says López. Patients at private institutions may not have an
easier time finding relief. Most private insurers do not cover
rare diseases, which are considered pre-existing conditions.
There are three steps for a drug to become available in
Mexico. The first is registration, which usually takes four
to six months, but the second and third steps are more
complicated. The second is to register the drug with the
National Health Council (CSG), which then adds it to the
National Formulary. Finally, a purchaser, such as IMSS,
ISSSTE, Seguro Popular or PEMEX, must accept the product.
Considering all the challenges to introduce orphan drugs
into the Mexican healthcare sector, regulators are trying to
simplify the process. “COFEPRIS understands very well how
orphan drugs are developed. It never asks for a long and
complex clinical trial because it knows a 50-100 patient trial
requires the same, or frequently more effort and investment
to develop and it is really open to approving these drugs,”
López says. Due to those small numbers, orphan drugs do
not need to be retested in Mexico because the country
accepts FDA or EMA certification.
The result is a faster introduction of orphan drugs into
the country, benefitting many patients. “There are about
500 patients receiving lysosomal treatment for six
different diseases and the compliance rate or adherence
to treatment is just under 80-90 percent. This is very good
when compared with that of chronic diseases,” López says.
This will also benefit orphan drug manufacturers, which are
studiously working on the development of more medicines
to treat those patients. According to López, the future of
the market depends on continued innovation.
Rare diseases are often difficult to treat because developing
medications for them is costly for manufacturers, which
can make them prohibitively expensive for patients and
insurers. To address this problem, COFEPRIS is supporting
drug manufacturers, such as BioMarin, with simpler
administrative processes.
Rare diseases affect less than five in 10,000 individuals,
but with thousands of rare diseases, millions are affected.
In Mexico, 8 million individuals are estimated to have one,
according to the Mexican Federation for Rare Diseases
(FEMEXER). Medications used to treat rare diseases are
called orphan drugs and their development can be costly
due to the nature of the diseases themselves. BioMarin, a
California-based pharmaceutical company specializing in
orphan drugs for achondroplasia, hemophilia and several
types of Mucopolysacharidosis (MPS), says there are several
factors that complicate their production and distribution.
“Gaining access to treatment is becoming more and more
complex, mainly due to three reasons: cost, availability of
government resources allocated to rare disease care and
lack of knowledge of the authorities and doctors,” says
David López, Country Manager of BioMarin in Mexico.
The correct diagnosis of a rare disease can be hindered
by a physicians’ unfamiliarity with it, complicating the
generation of a patient population for clinical trials. López
says that frequently it is only after a successful treatment
is developed that doctors increase their awareness and
know what to look for in patients. All medications must be
tested on sufferers of the condition they treat, yet for rare
diseases these patients can be scattered over countries and
continents. For this reason, clinical trials are multinational
with a handful of patients in each country, complicating
logistics and raising costs.
Providing treatment for these diseases in Mexico runs into
additional difficulties since the drugs, produced at high
cost and in fewer quantities, tend to be more expensive,
leaving a large percentage of sufferers depending on the
social security system for their treatment. López estimates
that 40 percent of sufferers depend on IMSS for their rare-
ORPHAN DRUGS FACE TOUGH ENVIRONMENT
DAVID LÓPEZCountry Manager of BioMarin Mexico
83
After overcoming initial mistrust from the public, generics are making inroads
in the Mexican drug market, including private institutions, as a cost-effective
alternative. A change in law requiring doctors to write the generic name of a
medicine on a prescription has greatly boosted consumer awareness of prices
and the efficacy of generics. Many companies focus on sales to the government,
which needs to stretch budgets to cover an increasing number of patients, thus
choosing generic medicines over brands where possible. In recent years however,
public sector institutions have begun a consolidated purchasing process to
increase efficiency and savings, which has driven prices so low companies are
beginning to turn away from the single largest purchaser of generics looking for
alternative business opportunities.
This chapter will present an overview of the companies that produce non-
patented medicine in Mexico, be it chemical or biotech, branded or non-branded
generics and OTCs. It will explore the challenges generics have yet to overcome
and the future that the men and women at the helm of the companies have in
mind for these medicines, especially in light of the wave of patent expirations
during 2015-2020.
GENERICS & BIOSIMILARS
4
85
CHAPTER 4: GENERICS & BIOSIMILARS
86 ANALYSIS: Price Pressures Pushing Generics to Private Sector
88 VIEW FROM THE TOP: Efrén Ocampo, Grupo Neolpharma
90 VIEW FROM THE TOP: Alfredo Rimoch, Liomont Laboratories
91 VIEW FROM THE TOP: Juan Aguirre, Grupo Bruluart
92 INSIGHT: Aristides Torres, Vanquish
93 VIEW FROM THE TOP: Felipe Espinosa, Laboratorios Collins
94 VIEW FROM THE TOP: Américo García, Apotex
96 VIEW FROM THE TOP: Guillermo Ibarra, Teva
97 INSIGHT: Alexis Espinoza, AMSA
98 INSIGHT: Gurulinga Konanur, Hetero
99 VIEW FROM THE TOP: MS Nagendra, Zydus Pharmaceuticals
100 VIEW FROM THE TOP: Francisco Hernández, Wockhardt
102 VIEW FROM THE TOP: Sandeep Bane, Accord Farma
103 INSIGHT: Arístides Salazar, Emcure Pharmaceuticals
105 VIEW FROM THE TOP: Ricardo Ganem, Perrigo
106 INSIGHT: José Díaz, Micro Pharmaceuticals
107 INSIGHT: William Escobar, Grupo Unipharm
86
PRICE PRESSURES PUSHING GENERICS TO PRIVATE SECTOR
The government’s decision to initiate consolidated
purchasing schemes to buy generics as an access
strategy has made it one of the largest single generics
customers in the world. That purchasing power has been
a double-edged sword, however, with prices dropping to
such a point that many generics companies have stopped
seeing sales to the government as a priority.
“We hardly sell to the government because it has adopted
an aggressive price-reduction policy. This policy erodes
income at companies like pharmaceuticals, which need
to earn money to continue reinvesting in research. For
companies like us, selling to the government is not
viable. We have decided to only sell particular products
to state hospitals, so 95 percent of our sales are to the
private market,” says Felipe Espinosa, CEO of Mexican
pharmaceutical company Laboratorios Collins.
In the 2016-2017 consolidated purchases, MX$41.9 billion
(US$2.3 billion) was spent and MX$3.4 billion (US$188
million) was saved. Sixty-three percent of the total amount
spent, or MX$23.4 billion (US$1.3 billion), was spent on
generics, according to IMSS. Generics companies, those
either intent on entering the Mexican market or already
established here, are adopting alternative strategies to
boost sales and to detect new opportunities for growth.
The market, many say, is just too big to ignore. “Zydus
is a new operator in Mexico and we are interested in
expanding our operations. There are various options to
do so and to become relevant to the market. We entered
Mexico in 2013 and we want to grow both organically and
inorganically. There are few trillion-dollar economies in
the world, so Mexico is a huge opportunity. If any global
generic company wants to increase in size
and importance, it must have a presence
in the larger markets and Mexico is the 11th
largest pharmaceutical market in the world,”
says MS Nagendra, Director General of Indian
pharmaceutical company Zydus Pharmaceuticals.
According to Seale & Associates, the Mexican generics
market as a whole was worth US$3.3 billion in 2015 and
according to the latest available data from statistica.com,
generics sold to the public sector represented 59 percent
of units in 2014 but only 15.2 percent of value. Retail
brands or private labels represent 8 percent of units and
20.2 percent of value.
In the past, generics were seen as unreliable alternatives
due to cultural stigma but this has changed over the
last decade, mostly due to government purchasing
preferences and increasingly strict regulation. NOM-
220 – SSA1 – 2015 is the updated law that regulates
pharmacovigilance, a final version of which was published
in the Federal Official Journal in July 2017. Such regulation
helps guarantee the validity of medicines and stops
unreliable drugs from tarnishing the sector's reputation.
Additionally, to improve access to treatment, COFEPRIS
has begun liberating the patents of groups or packets of
drugs so that more affordable, generic versions can be
produced and commercialized. These actions from the
regulatory body have resulted in 491 new medicines that
cover 71 percent of causes of death in Mexico. “In total,
37 active substances have been liberated through our
generics strategy, producing 491 generics, which represent
MX$25 billion (US$1.4 billion) in savings while an extra 2
million people can be treated thanks to these savings. In
2017, we will continue with this strategy and more than 40
new molecule authorizations will be announced,” says Julio
Sánchez y Tépoz, Commissioner of COFEPRIS.
One alternative for those that already have manufacturing
plants in Mexico is to focus on private sector sales, as
the margins are typically higher. “At Wockhardt we are
focused on the private and semi-private sectors. Tenders
might give the perception that the government is the
biggest market but we need to realize that most of the
money is in the private sector. Most of us will never go to
an IMSS hospital. We prefer to go to a private hospital,
which means that private insurance policies are increasing
and are becoming a benefit that some companies offer
their employees in Mexico,” says Francisco Hernández,
ANALYSIS
Generics, a cheaper alternative to patented medications,
are a key government strategy to provide healthcare for an
increasingly sick population. However, pushing down prices is
pushing some companies to seek business elsewhere
Out-of-pocket expenditure dropped from 41.8% to 40.8%
between 2012 and 2014
87
Vice President Latin America of Wockhardt, a generics
company. “We want to reach the private market because
there we can promote the new model of doctor’s offices
in pharmacies that many prefer because it is cheap, fast
and closer to the point of sales,” he says. “In 2013, when I
started operations in Mexico, the government market was
70 percent of our sales and private market sales were 30
percent. This number has changed over the years and in
2016, 60 percent was private and 40 percent government.”
Another option generics companies are exploring
is to manufacture private labels for others, such as
pharmaceutical chains or retailers that market their
own-brand. “The fastest-growing sector in Mexico is the
private-label business, of which the largest manufacturer
worldwide is Perrigo. That, combined with the trend
of having doctors’ consultancies in pharmacies, so-
called “doc-in-a-box” programs, is the factor boosting
the private-label sector,” says Paul Doulton, Founder &
Managing Partner of Oriundo, a consultancy composed of
former CEOs that helps new entrants to Latin American
pharmaceutical markets.
Those without a production plant can do the exact
opposite: to look for a company to manufacture for
them. “One of the alternatives we are looking at while
waiting to gain critical mass is to associate with national
laboratories that can manufacture for us here in Mexico,”
says José Díaz, Executive Director of Indian generics
company Micro Pharmaceuticals Mexico.
Other strategies being looked at by companies include
making the most of COFEPRIS’ agreements and Mexico’s
central position in the Americas to export to Central and
South America and licensing products to well-established
companies in the Mexican market. “Mexican requirements
cover many of the demands other countries make, so if we
comply with COFEPRIS we are covering other countries’
rules too. There is also fast-track with other authorities like
INVIMA in Colombia, which makes it easier for us to export
to other countries,” says William Escobar, Director General
of Swiss-Guatemalan generics company Grupo Unipharm.
Those that are committed to selling to the public sector
plan to win on volume instead of on price by building
or buying a manufacturing plant in Mexico, thus gaining
access to an increased number of tenders. “Mexican
law states that only Mexico-produced products can
participate in the largest tenders. This is why we want
to construct a manufacturing plant,” Díaz says. “This is
what we are doing: supplying products that are out of
stock elsewhere. At the moment, we can only aim for
the crumbs of the cake, while companies that produce
in Mexico take large slices.”
Similar but not identical to
reference product
20-30% discount over reference
product
US$100M – US$200M in
development costs
8 – 10 year development timeline
No interchangeability or
automatic substitution
Sources: COFEPRIS, Deloitte, Seale & Associates
Between 2012-2016 the price of
generics in Mexico dropped 61%
37 active substances have been liberated in 14 packets
Resulting in 491 new medicines
That address 71% of total disease-related deaths
Lower prices have enabled the treatment of an additional 1,998,202 patients
And represent savings of MX$24.6 billion (US$1.4 billion)
GENERICS IN MEXICO
THOSE RESPONSIBLE FOR PHARMACOVIGILENCE UNDER NOM-220-SSA1-2015
Registration holder
Clinical research centers
Warehouses Doctors
Pharmacies Distributors
Sanitary authorities
Health professionals Patients
US$3.3billionvalue of the Mexican generics market
Bioequivalent and identical to
reference product
80 – 90% discount over
reference product
US$1M – US$5M in development
costs
3 – 5 year development timeline
Interchangeable with reference
product
KEY DIFFERENCES BETWEEN BIOSIMILARS AND GENERICS
GenericsBiosimilars
88 Q: What areas has Grupo Neolpharma targeted in the last
12 months?
A: We have just completed construction of the plant
area in which we will be producing nanotechnology. We
are moving our production capacity for pilot batches of
biotechnology products there and we are also increasing
investment so that all pilot production is carried out under
GMP conditions.
Q: What is Grupo Neolpharma and CINVESTAV’s prize for
innovation in bio-nanotechnology?
A: Biotechnology and nanotechnology are two lines in
which we are interested in stimulating research. The prize
was linked to pharmacology but it is now more open as it
has enabled the creation of new materials. The invitation to
participate is open to all the institutions and professionals
working in those disciplines and the prize is MX$300,000
(US$16,666). Half of the award is to reward the researcher
and the other half is to fund the continuity of the winning
project. The purpose of the prize is to create new talent,
provide exposure and increase the diffusion of these kinds
of scientific proposals. We are approaching 2016’s winning
researcher to ask for his help capsulating some drugs we
want to deliver to the limbic part of the brain. He could
provide us with a smaller mechanism that would let us break
through this barrier. By allying with CONACYT and using
its methods of diffusion, if something could be useful for
other laboratories they can come to an agreement with the
council. This also enables us to approach others directly.
It is much more concrete and there are fewer risks when
approaching someone.
Q: What new heights would nanotechnology enable the
pharmaceutical industry to reach?
A: Nanotechnology is a technique that can be used to
produce medicine. If a medicine that causes unwanted
side-effects is made using nanotechnology, those effects
can be reduced instead of damaging the stomach or liver.
Therefore, it is most useful for eliminating the side-effects of
already approved medicines, such as in oncology. Basically,
nano-capsules can reach cells and they enable the use of
smaller doses. Our innovation in this area is focused on
oncology and diabetes.
Q: What solutions is the group providing to the Mexican
health industry?
A: We must first develop medicines and provide it to the
greatest number of patients possible. In our case, this
PRIZE STIMULATES R&D INNOVATION IN BIOTECH, NANOTECHEFRÉN OCAMPOPresident and Executive Director of Grupo Neolpharma
VIEW FROM THE TOP
89
Q: Where do you rank Mexican talent globally? Is it
prepared for the rapid changes occurring in companies?
A: There are no problems with talent for making
biotechnological medicine in Mexico. We should look
at Denmark and Sweden, where they have recognized
through studies that biosimilars do not have more adverse
effects than innovative products and that they have the
same therapeutic benefits. We must focus on the resulting
benefits in terms of cost once the patents expire.
Q: How is the group’s growth oriented?
A: By 2020 we want to reach 100 percent growth in
comparison to where we are now. We have already achieved
a respectable size in Mexico and other strategic foreign
markets so we are confident we will be able to meet this
new expectation. Toward the achievement of this goal we
have increased our presence in the oncology and metabolic
areas with our biosimilar offer. In the future we want to grow
in therapeutic areas and begin producing patented and
high-efficiency treatments, while increasing our sales force.
Q: What is Grupo Neolpharma’s message to the industry?
A: Grupo Neolpharma wants to coordinate the efforts of the
research institutions, the laboratories and the government
to lead the Mexican pharmaceutical industry to an
international level. The industry has to keep in mind Mexican
epidemiology and which technologies could lead us to the
best medicines for the Mexican population. However, this will
only be possible with a confident attitude that overcomes
the financial challenges we might encounter in the process.
implies a national cost, which determines the price. We have
done this with our product Transkrip, the patented version
of which costs six times more. Our body is constantly
defending itself against attacks and when certain cells get
infected, they no longer work as well. Transkrip activates
our cells to better absorb the medicine and in some cases
it also reactivates the immune system. TransKrip is a drug
based in epigenetic therapy that increases the progress-
free period of patients with advanced cervical cancer.
Currently it is used for cutaneous lymphoma of T-cells and
myelodysplastic syndromes. We are completing a project
on the application of this technology for lymphoma in D
cells. In some cases it has 100 percent efficacy and there is
a fast therapeutic benefit.
Q: Where is most of your R&D being carried out?
A: I am looking to mix research by stages, to do some in
Mexico and some in the US. There is an innovation and
development research center called Cediprof in Puerto Rico,
a site that allows some of our research to be conducted in
an FDA environment. This is a strategy we want to extend
to other Mexican companies that are working on innovative
projects, so they can develop the early research phases in
Mexico and then conclude their research in Puerto Rico
without a major investment. This will create fiscal benefits
and empower research.
Q: What opportunities will IMSS opening to clinical
research bring for Grupo Neolpharma?
A: That is extraordinary because it is where the most patients
are. For example, the application of the D-cells treatment
is valid only for a small number of sick patients with those
characteristics. IMSS is where most of them are. In the INCan,
the process of incorporating the number of required patients
was long. However, with IMSS we can more quickly identify
people with a certain condition and deliver the product.
Grupo Neolpharma is a Mexican group that comprises
several pharmaceutical companies: Alpharma, Neolpharma
and Psicofarma. It specializes in R&D, manufacturing,
commercialization and distribution
90
VIEW FROM THE TOP
BIOTECHNOLOGY, THE SCIENCE OF THE PRESENTALFREDO RIMOCHDirector General of Liomont Laboratories
Q: What are Liomont’s most important contributions to the
Mexican pharmaceutical industry?
A: Liomont has about 2.7 percent market share and has
brought products to a broader range of the population.
We have created a number of alliances with academic
institutions such as the Institute of Biotechnology of UNAM
and the National Genomics Laboratory for Biodiversity
(LANGEBIO) of CINVESTAV. Liomont is an active
participant in associations such as ANAFAM, CANIFARMA
and the Mexican Pharmaceutical Council (CFM). We
have entered the field of biotechnology with the first
recombinant influenza vaccine and we are working on the
development of an anti-zika vaccine in collaboration within
an international consortium that includes companies from
Argentina, Brazil, Japan, the US and Mexico.
Q: At what stage of development is the zika vaccine and what
testing does Liomont do in Mexico?
A: Clinical trials for the zika vaccine will start soon
through a program with a partner company called Protein
Sciences. Liomont has started an important clinical trial
of its influenza vaccine in Mexico with children between
six months and 18 years. We are developing two biosimilar
products together with the company Oncobiologics.
The phase I clinical trials for those products have
already concluded. We have also developed another
monoclonal antibody in collaboration with the Institute
of Biotechnology of UNAM.
Q: What sector presents the greatest opportunity for
Liomont?
A: Liomont is mainly present in pain, respiratory,
gastrointestinal, antivirals and antibiotics. In terms of
economic sectors, Liomont is mainly focused on the private
market. Even though 40 percent of Liomont’s products
are destined for the public sector, sales in this sector only
amount to 6 percent of the company’s income. In terms of
regulations, clinical trials have become more complex and
expensive. We need transparency and support in terms of
intellectual property and regulations.
Q: What are the challenges associated with introducing
biotech medicines to Mexico?
A: It is an expensive process that we have approached
through two different routes. The first is by allying with
foreign companies such as Oncobiologics and another one
in Spain. We are also preparing some of the test designs,
while some of the protocols are being approved by
COFEPRIS. The second approach is through alliances with
local universities. Liomont creates projects with scientists
from academic institutions. The government has limited
funds but it is the main buyer of biotech and high-specialty
drugs in Mexico. Liomont must achieve accessible prices to
supply the demand for these products in the public sector.
Q: How does Liomont compete in the generic business with
pharmacy chains that develop their own brands?
A: Physicians know Liomont’s products, they trust our
brands and prescribe them. However, pharmacists often
substitute the prescribed product for a generic house brand.
A change in the Regulation of Health Inputs requires doctors
to prescribe an active ingredient, as well as a brand, which
has boosted consumer awareness of prices. Nevertheless,
Article 79 of the same regulation states that if there is a
substitution, this must be authorized by the physician who
wrote the prescription. If not, the product supplied must
be the brand as prescribed. Our main strategy to prevent
generic substitution is based on the doctors associating our
products with quality and trust, so that their prescriptions
are supplied as they are issued, and not substituted.
Q: What are your development plans in the short term?
A: Liomont will continue marketing the trivalent version of
its biotech influenza vaccine while filing with COFEPRIS for
the tetravalent version that will be sold in 2018. Liomont is
building a manufacturing and distribution site in the State
of Mexico. In the area of generics, Liomont will be launching
around six new brands in Mexico each year.
Liomont is a Mexican pharmaceutical company with high quality
products in the prescription and OTC segments, currently
occupying the 8th position in the national pharmaceutical
market in units
91A: We are working on these liberated molecules. COFEPRIS
has developed a useful strategy based on risk assessment
and this patent liberation makes the register of new and
generic products more efficient. We can now get generic
drugs to market much faster and even expect to release
between six and eight products this year from the packages
of 2016 and 2017 in hormonal treatments, some in painkillers
and anti-inflammatories.
These areas were chosen because we have noticed that
painkillers and anti-inflammatories have undergone a
similar process to that of antibiotics in the past. People
have become accustomed to consuming them without a
prescription, developing a higher tolerance to painkillers, so
we expect the new molecules to have a more efficient effect.
Q: What are your ambitions and plans for 2017?
A: We have already expanded production at our plant, partly
due to COFEPRIS’ regulations. We are complying with all
these regulations and are ready to continue our growth in
the manufacturing business through development of more
products. We are looking for new international ventures for
products we sell in large volumes, such as paracetamol or
diclofenac, which in Mexico are largely sold as commodities
and have a better margin elsewhere.
On the commercial side, Farmacias GI has a new image and
an aggressive expansion plan that includes the launching
of a new media campaign. In the distribution business, our
goal is to train independent pharmacies. Many of these are
important to rural communities and underdeveloped parts of
the country. We are also expanding our business by visiting
convenience stores and large national chain pharmacies to
address a renewed interest in our products in sectors that
traditionally were not attracted to generics but now cannot
get enough of them.
Q: How is Grupo Bruluart working to make patented
medicines more widely available?
A: One of our biggest projects has been pushing lines of
patented medicines into the impulse chain. Besides the
old big distributors, there are several pharmacies, clinics
and other retailers where patented drugs are sold. It was
thought the most economically challenged social group
would not buy patented medicines because of the high
price but some prefer to acquire medicines at their local
pharmacy.
Q: What were the advantages of being ready six months in
advance before the change in NOM – 059 in 2016?
A: It helped us get ahead and minimize the effort needed to
comply with the standards. Since we were ready, the number
of topics we had to cover once the norm was approved was
small so we did not have to dedicate many resources to it
to comply. We also founded the Instituto de Farmanegocio,
through which we provide an integral advisory service,
guiding our clients step-by-step to meet COFEPRIS, SAT and
other regulatory requirements. Some of our customers are
taxed according to the small contributor regime. As a result,
the taxes of those companies are sometimes in disarray
and they fail to meet regulations. We have convinced and
advised several customers to fix their fiscal situation so they
can access various benefits and minimize the risk of not
meeting fiscal and health regulations.
Q: To what extent do your products target specific niches?
A: We started selling generic drugs that target the general
population, such as painkillers, multivitamins and antibiotics.
Now we are specializing in the hormone niche, especially
in contraception and hormonal care, because there is
less competition and only a few can develop injectable
contraceptives and hormone drugs. There is a learning curve
with hormonal medicine so we have been focusing on these
areas for around two years. It is difficult to come up with
a market percentage but we manage three of the top 10
products in the public sector.
Q: COFEPRIS is liberating several packages of innovative
medicines. How is that affecting Grupo Bruluart?
PUSHING PATENTED MEDICINES INTO THE IMPULSE CHAIN
JUAN AGUIRRECommercial Director of Grupo Bruluart
VIEW FROM THE TOP
Grupo Bruluart includes the importer and manufacturer IM
Bruluart, Laboratory Bruluagasa, generics company Brudifarma
and pharmacy chain Farmacias GI. Its goal is to make high-
quality medicine accessible to all
92
INSIGHT
SPECIALIZED APPROACH TO ACCESS THE PRIVATE SECTORARISTIDES TORRESDirector General of Vanquish
In Mexico, the main health concerns are a national public issue
demanding attention from all players in the industry. As a
result, national pharmaceutical companies such as Vanquish
are shaping their business units to assist the Mexican needs.
“Our institutional portfolio deals with cardiovascular diseases,
CNS, some endocrine issues and antiretroviral drugs for HIV.
Our private line is specialized in women’s health and abnormal
conditions like Huntington's, Parkinson’s, and Alzheimer’s,”
says Aristides Torres, Director General of Vanquish.
The company’s current product distribution is 90 percent
generics and 10 percent innovative. However, it expects to
grow its patented medicine area. “Our initial intention was
to have a 50/50 split between the public and private market.
Probably the private is harder to reach but we expect at
least a proportion of 60-65 percent against the rest of the
market,” says Torres. Its strategies for private-sector players
include boosting its portfolio options, targeting neurology and
women’s health. Vanquish’s business objective is to achieve
growth between MX$1.5 billion (US$83 million) and MX$2
billion (US$111 million) in revenues by 2019.
Vanquish is the first pharmaceutical company to bring a patch
therapy system for Alzheimer’s to Mexico. According to the
National Institute of Geriatrics, around 800,000 people in
Mexico are suffering from Alzheimer’s. The company is also
commercializing a drug for Huntington disease, a progressive
brain disorder. “We have the only orphan drug in the country:
a product approved by the FDA to treat Huntington and
similar diseases that guarantees 85 percent efficacy,” Torres
says. According to the National Institute of Neurology and
Neuroscience, in Mexico there are around 8,000 people
suffering from Huntington's and other similar diseases.
Expiring patents offer the manufacturer another avenue to
expand its base of therapeutic alternatives. “We have recently
started a portfolio of all generics whose patents are about to
expire and we are working with a combination of products
that today are generics and could have therapeutic benefits
for the diseases we are focused on,” says Torres. Vanquish is
pursuing the patent for Tenofovir, which is a component of
Atripla, the most important product in treating HIV. “It is the
main therapy used by CENSIDA. It has the biggest demand in
the country.” According to Torres, no company in Mexico has
a complete antiretroviral portfolio. “We want to manufacture
and commercialize it, so we can offer a complete service to
institutions and create greater access at reduced prices.” The
goal is to provide a generic line that could work well with the
government’s tighter budget.
93
VIEW FROM THE TOP
expertise can refine their offering and make their businesses
more profitable. We want to make health products more
affordable for the general population so people have
options. We also expect this to help us reach the objective
of 1 percent market share.
Q: To which Central American countries are you planning
to export to and what criteria do you use?
A: COFEPRIS has done a great job becoming an international
regulatory agency, which has allowed us to open borders.
The first criterion is to select those countries that recognize
our sanitary regulations with no extra paperwork needed.
Many of our products are already available in Chile, for
example. The second criterion is the size of the market,
leading us to be interested in Colombia and Costa Rica.
Argentina and Brazil are not priorities as the latter is
protectionist and the former has economic issues. Colombia
is the second most important market after Brazil to which
we already export a little but we paused this because the
Mexican market demands our entire production; it has
grown significantly so we are 100 percent concentrated
on it. Once we have expanded industrially, we will continue
to export, which may merit us building an annex to our plant
in Guadalajara. Next to the plant there is a land plot that
we are clearing and preparing for expansion. We hope to
begin building in the first quarter of 2017.
Q: What other short-term plans do you have for
Laboratorios Collins?
A: Within the group there is another subsidiary called
Salud Natural that has a naturist focus and markets herbal
products. We hope to obtain the GMP for Salud Natural’s
plant. It would be the first natural product plant in Mexico
to obtain a GMP and would allow us to export products to
the US, which is another objective for 2017.
Q: What hurdles do Mexican generics companies face when
trying to supply the government?
A: We hardly sell to the government because it has adopted
an aggressive price-reduction policy. This policy erodes
companies like pharmaceuticals, which need to earn money
to continue reinvesting in research. For companies like us,
selling to the government is not viable. We have decided to
only sell particular products to state hospitals, so 95 percent
of our sales are to the private market. Any business on which
we do not make a 20 percent margin is not viable for us.
Q: Collins has said it is targeting 1 percent market share of
generics in Mexico in five years. What are your next steps?
A: In this changing market, five years is a long time. Beyond
that time frame is unpredictable but we plan to penetrate the
market to 1 percent and then change the type of business
we manage. We work in pharmachemical generics but in five
years we would like to enter the biosimilars market. We also
would like to enter the oncological sector because it is more
profitable and sells in greater volume. Biosimilars already
exist in Europe but many problems with sanitary regulations
remain, which has impeded biosimilars from developing
worldwide. These problems appear close to being resolved
and once they are, biosimilars will develop quickly because
many companies in Europe and the US are moving rapidly.
Here in Mexico, some companies like ProBioMed, Cryopharma
and Silanes have undertaken extensive research but have
not advanced further due to uncertainty with regulations.
There is still no fixed date for this to conclude because so far
COFEPRIS has mainly focused on revising technical aspects.
Q: What results are you expecting from your joint venture
with FEMSA?
A: FEMSA wants to enter the Mexican market with 1,000
pharmacies and began acquiring units three years ago. It
established strong relationships with commercial partners
and we were lucky enough to be selected. The relationship
is just beginning but is going well and we are working on
becoming one of their main laboratories. Our goal with all
our partners is to bring our experience and knowledge to
the table. Sometimes we can suggest a product they do not
have in their portfolio and generally our laboratories and
CAUGHT BETWEEN DEVELOPMENT
AND REGULATIONFELIPE ESPINOSA
CEO of Laboratorios Collins
Laboratorios Collins is a Mexican pharmaceutical group
with 47 years in the market focused on the manufacturing of
high quality medicine at affordable prices. Its main areas of
operation are generics and veterinary care
94 bidding process will make some distributors stronger than
they already are and that concerns me. For example, a hospital
far away in Hermosillo may request a product within 24 hours.
For this, we need to work with a distribution company that
has its own center because Mexico is five times the size of
France and we cannot deliver any given product anywhere
in the country within 24 hours. To become more efficient,
healthcare providers are ditching their warehouses and we
are becoming their warehouse. We also must have different
logistics partners because some prefer to work in certain
therapeutic areas or in specific regions. Ahead of a tender,
they want a letter of endorsement that says we will supply
them with a certain product if they win. We sign with the
minimum volume and price and if they win the tender, we sell
the product to them. Some tenders are national, international
or mixed. It is not that they actually want to bring in someone
from the outside but it happens that no local company can
meet the requirements. We participate as a national company
if the product is manufactured in Mexico and international if
it is manufactured in Canada or India. Products made in India
are more problematic because the tender process generally
does not accept these, perhaps because the government is
not confident about the quality.
Q: How is the authorized third-party system working?
A: It works well. It costs money because we have to pay for the
service but we get faster approvals. It is beneficial to us and to
patients, who get new products sooner, and puts lower-cost
generics on the market faster. Some Big Pharma companies
are trying to extend IP protection, looking for opportunities
in the legal framework. As patients and consumers, we
should not allow this. At Apotex Mexico we respect patents,
of course, but they should not be extended for reasons that
do not represent real invention.
Q: How much R&D is done in Mexico and how important is
that to the development of your business?
A: Most of the R&D is performed in Canada but our Mexican
research complements our efforts in R&D and is more focused
on local needs. Canada focuses on the big markets like itself
and the US, while in Mexico we look at Latin American
opportunities to complement them. We have developed 55
Q: What is Apotex’s strategy for launching its products
in Mexico?
A: Over the past 12 months we have been first to market
for mometasone, a nasal spray for rhinitis and allergies;
diosmin-hesperidin, for chronic venous insufficiency;
leflunomide, on the side of rheumatoid arthritis and we
are now launching tramadol-paracetamol, a painkiller for
moderate to severe pain. We are reshaping our strategy
to be more active and efficient in product launches. The
company is targeting different opportunities in the generics
segment and launching a broad portfolio in CNS products,
which comprises antipsychotics and antidepressants, among
others. We will launch over 25 products in three years through
a full portfolio with a different strategy targeting physicians,
which is unusual for Apotex. The company will also introduce
some branded products rather than simply generics to
complement our product lines. The use of generics in Latin
America is different to North America and Europe. It is still
generally a branded market. Bioequivalent products are
not available in every Latin American country for example.
Patients associate brands with quality so, despite the quality
of bioequivalents, there is still a preference for brands. We
are catering to the demands of the market.
Q: Why do generics generate this level of resistance?
A: Generics have come a long way. Initially regulation was
not so strict, so in those days there were products that
did not comply with international quality standards. This
bias still exists but regulation is now stricter. COFEPRIS is
overwhelmed with the work of auditing all manufacturers
and ensuring the stricter requirements are properly covered.
This is an issue and some will be left behind because they
cannot keep up with rising standards. They would have to
invest a lot of money to catch up.
Q: What problems do you see with the bidding process
established by the government?
A: It changes constantly. At the moment it is talking about
packages, which we are still trying to understand. Packaging
is more complex because it is not possible to have every
product. There are some requirements that are impossible
for us to meet so we need to use distributors. I think the
GENERICS FIGHT BRAND BIASAMÉRICO GARCÍADirector General Latin America of Apotex
VIEW FROM THE TOP
95
Republic, Chile, Argentina and we are about to close a deal
for Colombia. The generics segment will remain one of the
main sources of growth for Mexico. We will continue to expand
to new therapeutic areas, such as prescription. We will start
with CNS over the next three years. It will take us that time to
gain the relevance we want to have in that area and then I will
jump to another therapeutic area. Apotex has been a leader
in Mexico since it entered the country. We are celebrating
20 years here and 41 years in Canada. We are one of the few
vertically integrated companies, with two API manufacturing
sites in Mexico. For 60 percent of our products manufactured
in Canada, the APIs come from our Mexican sites. We are
committed to this country like no other company.
Q: How does the legal environment protect generics
companies from litigation in Mexico?
A: We still have to work on this. We need to get together and
be more visible to the authorities to make sure we are being
treated fairly. Being close to the US in general helps because
we want to be recognized as a highly regulated country that
can manufacture products that can be sold everywhere. As
we deliver on that, it becomes easier to build trust.
Q: How has the wave of patent expirations benefited Apotex?
A: The products I mentioned for which we will be first to
market have expiring patents and we are using the opportunity
as soon as we can. This is happening across therapeutic areas.
For the CNS line, it will be branded so we do not need to
launch the product as soon as the patent expires. For generics
however, it is vital to be first.
products in our local facilities and many more in Canada.
In Mexico, we invest 6 percent of sales revenue in R&D and
4-6 percent more in renewing equipment to improve our
technology. Canada invests a much higher percentage.
Q: What types of drugs are researched in your Mexican
facility?
A: I have been working on getting back to basics, reshaping
the organization’s main activities, and then working a
little on the strategic view of where we are going. Over
the past few years we have been focusing on doing things
better rather than on specific therapeutic areas, except for
the CNS line. What we are doing now is aligned with the
opportunities we see to penetrate segments in which we
do not yet have a presence.
Q: Has the peso depreciation affected your operations? How
do you mitigate currency risk?
A: It has affected us, of course. We try to not transfer the full
impact to our customers. The company is absorbing some
of it by developing efficiencies. Some we are tackling now,
improving efficiencies and productivity. We are also trying
to develop the export segment because we export in a hard
currency. When reviewing market figures, it is possible to see
that Apotex is not raising prices as quickly as inflation or in
line with the currency’s depreciation. My view is that we will be
depreciated, but with the fundamentals under control it will be
strategy more than a consequence. We export a good number
of our Mexican manufactured products to South America. We
negotiate most of those sales in dollars, which mitigates the
effect to a certain extent.
Q: What expansion plans do you have for the coming years?
A: We manage the LATAM region from Mexico. Now we
have three affiliates in Panama, Nicaragua and Costa Rica
and we already have partners in Guatemala, Dominican
Apotex is the largest Canadian-owned pharmaceutical company,
with over 10,000 people employed worldwide in its research,
development, manufacturing and distribution facilities. The
company produces around 300 generic pharmaceuticals
View of a blister packing and conditioning assembly line
96 to balance the products we bring from Teva Global with
the needs we see in the country.
Q: Quite a bit of your pipeline is in pain and respiratory.
What market need does this respond to?
A: Pain is the number one cause of medical consultations in
the world, including Mexico. Patients go to doctors because
of symptoms and one of the primary symptoms is pain.
Because of this, pain is something that we at Teva take very
seriously. We want to offer patients choices that include
innovative combinations to make them feel better.
Q: Eritropoyetina theta was recently brought to Mexico.
What are Teva’s expectations for this product?
A: An area in which Teva is innovating is in its oncology
supportive care portfolio. So far, we have brought
two innovative molecules to Mexico. Eritropoyetina
theta, which helps patients undergoing chemotherapy
treatments improve their levels of red cells by treating
secondary anemia that results from chemotherapy. The
second molecule is Lipegfilgrastim, which treats febrile
neutropenia (fever and low white blood cells). Both
products are extremely important for patients undergoing
chemotherapy because they allow them to continue with
their treatment without having to suspend due to negative
effects. Some state institutions have already begun using
these products, which suggests that we are on the right
track. We want to have these products included in the
National Formulary in the future.
Q: How many of Teva’s products are included in the
National Formulary?
A: We participate every year in the public tenders held
by the government through IMSS, ISSSTE and other
institutions. Regulation has resulted in many benefits
for both patients and the government. We can compete
because we have the necessary scale to offer competitive
prices, a network of pharmaceutical plants throughout
the world and we are also one of the world’s main API
manufacturers. This gives us significant power to offer
quality products at reasonable prices in government
tender processes.
Q: What are the challenges associated with operating in
so many different therapeutic areas?
A: The biggest challenge Teva faces is to follow people
through all the stages of their life. We are present in several
areas, including CNS, women’s health, pain, multiple-
sclerosis and oncology; our goal is to give patients access to
innovative pharmaceutical solutions at an accessible price
across the countries we work in. We want to contribute to
generating greater access to healthcare worldwide.
Q: How does Teva operate in both the public and private
sectors and how does it choose which areas to focus on?
A: In Mexico, we take part in the public sector by selling
products to the government and health institutions by
participating in government tenders. In the private sector
we participate through chain pharmacies, self-service
retailers, distributors and local and regional wholesalers.
Finally, a company must choose its therapeutic areas based
on its R&D capabilities. Companies must deliver products
that provide value for the payer, the institution, the patient
and the doctor.
Q: How much R&D does Teva do in Mexico?
A: Globally, we have 26 R&D centers. In Mexico, our products
undergo bioequivalence testing with patients through
authorized third parties. In addition, we have participated
in phase III and phase IV studies here in Mexico.
Q: How do you choose which products to bring to Mexico?
A: There is a selection committee in which medical,
commercial and business development perspectives
are taken into account. The country faces chronic-
degenerative challenges and there is a change underway
in the population pyramid. Twenty years ago, the common
problems patients faced were mainly infections; today, we
face chronic and chronic-degenerative diseases. We try
BRINGING INNOVATION TO THE ENTIRE POPULATIONGUILLERMO IBARRADirector General of Teva Mexico
VIEW FROM THE TOP
Teva is the world’s largest generics company, producing 120
billion tablets and capsules per year. The Israeli pharmaceutical
offers specialty medicines, generics, OTCs and APIs in CNS,
respiratory, oncology and women’s health
97
improving, updating and raising the bar for our plants. An
economist said that even if we do not want it to happen,
Mexico will be the seventh-biggest economy in the world
by 2027. There is an opportunity for us to partner with the
government, institutions, payers and doctors to provide
accessible and innovative medicinal solutions that benefit
patients and their families.
Q: What benefits have resulted from the company’s
acquisition of RIMSA?
A: It brought us a portfolio of products in the primary care
segment in which Teva did not previously have a significant
presence. These products will be relaunched after being
reformulated. They are products that have a strong reputation
and differentiation in areas such as pain.
Q: What are your ambitions in Mexico over the next five
years?
A: We have a defined 10-year plan. We want to continue
beefing up our portfolio from our pipeline and to continue
our organic growth, introducing the best talent we can to
the company while being socially responsible. We have a
portfolio of innovative products that touch lives, which is a
privilege for us because our activities transcend commercial
objectives. Our growth will be organic moving forward. We
have a generous pipeline of new products that are being
evaluated, reformulated or undergoing COFEPRIS submission.
Q: What are the advantages of manufacturing APIs instead
of buying them?
A: We do buy APIs from others but we manufacture a
large percentage of our consumption. We have three
pharmaceutical plants in Mexico: one in the State of Mexico,
another in Mexico City and the largest in Jalisco, in addition
to an API plant, also in the State of Mexico. Most of what
we produce is for Mexican consumption but we also export
to South America.
Q: How beneficial is having a Mexican office and having
COFEPRIS approval for operations in other LATAM countries?
A: Exporting is not easy. We export to Brazil, for example,
a country with strict regulations. We are glad to see that
COFEPRIS is taking the necessary steps to become an
internationally recognized agency.and has made the
decision to become a recognized and renowned agency.
Q: What is Mexico’s role in Teva’s global operations?
A: Teva has drawn up a list of countries with growth
markets and Mexico is among them. One of my jobs has
been to internally sell Mexico to our global headquarters.
It is a country that has industrialized greatly and is not
reliant on commodities; it has steady economic growth
of around 2-2.5 percent per year, which in the long term
makes Teva Global want to continue investing in the
country. We have invested many millions of dollars in
INSIGHT
The company aims to provide affordable medicines to
Mexican patients through retailers, distributors and a
range of pharmacies.
Espinoza says that although patients have begun to
recognize the quality of generic medicines, challenges
remain. “One challenge is the resistance to change by
prescribing doctors. They cling to patented medicines
as a means of identification and forget the patient’s
budget, which is what determines their decision to find
more affordable medicines,” he says. Present nationwide,
the company’s goal is to increase its sales volume and to
continue a steady pace of organic growth.
Laboratorios AMSA is the generics arm of Laboratorios
PiSA, one of the largest Mexican pharmaceutical
companies. Its main therapeutic areas are hydration,
dermatology, diabetes, cardiovascular, obesity and weight
control, pain, fever and inflammation. A particular area of
success the company has found is in its antibiotics line.
“AMSA probably has the third-largest sales volume of
antibiotics in the country. However, today we have many
products for cardiology. These two types of products
have something in common: they are generics. This is
AMSA’s most important business,” says Alexis Espinoza,
Managing Director of AMSA Laboratories.
GENERICS STILL FACE RESISTANCE FROM DOCTORS
ALEXIS ESPINOZAManaging Director of AMSA
98
INSIGHT
MANUFACTURE LOCALLY TO CREATE AFFORDABLE PRICESGURULINGA KONANURDirector General of Hetero Mexico
Generics provide a cost-effective alternative to branded
products, allowing for more accessible healthcare. This is
important as the general population is more financially able
to purchase the treatment it needs and the public sector
health institutions are able to purchase a larger quantity of
drugs. Despite initial reservations, the generics market in
Mexico is growing, mostly due to government consolidated
purchasing preferences for generics as it allows the
treatment of more patients on a shrinking budget.
Hetero Group, an Indian generics company, is one of the
main manufacturers of antiretroviral therapy drugs (ARVs)
worldwide with a third of the world’s market share. “For
every three patients, one is taking a Hetero product either
directly or indirectly as we supply APIs to other suppliers,”
says Gurulinga Konanur, Director General of Hetero Mexico.
“We want to bring all these high-tech, high-specialty
products to Mexico, manufactured locally at an affordable
price,” he says, adding that the company expects Mexico
to be among its best growth performers in Latin America.
“The generics market in Mexico is growing over 20 percent
per year and even branded generics are growing when
compared to innovative products.”
The general population is also increasing its generic
purchases as many must pay out of pocket in one of the
most privatized healthcare systems in the world. The OECD
reports that only 5.8 percent of GDP in 2015 in Mexico
was spent on healthcare, almost half of which was out of
pocket. Indeed, access to healthcare is one of the greatest
challenges facing the Mexican healthcare system. INEGI
figures show that only 62.2 million people had access to
IMSS services as of July 2016 and despite government
efforts, this figure represents only a 33.3 percent increase
in the 10 years since 2006.
The prevalence and availability of generics is important
for pandemics such as HIV/AIDS because drugs for these
diseases can be expensive and are needed by many.
HIV/AIDS treatment in Mexico is free for all, whether
registered with a health institution or not. It is therefore
important for drugs to be cost-effective. In 2015, the
National Center for the Prevention and Control of HIV/
AIDS (CENSIDA) reported around 200,000 people
living with HIV in Mexico and an estimated 100,000 new
infections. UNAIDS estimates there were 4,000 AIDS-
linked deaths in Mexico that year.
Although generics are growing at a faster rate and allow
for better access, the population continues to demonstrate
a brand bias, showing a preference for branded generics.
“I think over 70 percent of the Mexican population would
look for a good branded generic,” says Konanur. He adds
that although it took some time for branded generics to
be accepted, doctors are now comfortable prescribing
them. “Pharmacists also encourage generics. They receive
many kinds of incentives to promote the generics of the
pharmacies they belong to,” Konanur says. This is most
likely aided by the fact that many pharmacies stock their
own-brand generics and are looking to boost sales, he says.
Another main issue with access to medicine is the
growing counterfeit or black market. Many companies are
taking precautions to ensure they are not inadvertently
participating in this by ensuring both their medicine
and packaging does not fall into the wrong hands, says
Konanur. He explains that the generics sector is seemingly
less affected because the products are cheaper and more
widely available, adding that it is often the larger names
that are subject to counterfeit, just as in other sectors. “I
have not seen as many issues with counterfeits in generics
as in innovative products. The sales margins are smaller in
generics so they are not affected so much,” says Konanur,
adding that his company employs many innovative
packaging techniques that make the boxes difficult to
imitate. “We have one of the most innovative packaging
departments in the world.”
To further expand its Mexican presence, the company has
acquired land near Toluca and expects to be manufacturing
products from a custom-built factory there by the second
quarter of 2018. “We are in the planning stages and by
January 2017 we will be kick-starting construction,” Konanur
says, adding that foreign investment has aided the process.
99A: The vision established by our chairman is to make Zydus
a quality, global research-based company. Regulation
surrounding biotechnology and biosimilars is not yet
extensive. We took some time to fully understand this and
we are now efficient at handling small molecules. Officials
worldwide face big challenges in laying down the pathways
and putting systems in place for biotech. COFEPRIS is
dynamic and understands the importance of biosimilars due
to the exorbitant cost of innovators. Over the past 10 years,
the importance of biological products in terms of usage and
market share has increased, which is a clear indicator of
the future of the pharmaceutical industry. Few are capable
of producing them, which gives Zydus an advantage in
tending to this need.
Q: What will be Zydus’ priorities for next five years in
Mexico?
A: We want to consolidate our CNS business in the next five
years. We will look at how to leverage our strengths for R&D
capabilities, to look for opportunities for inorganic growth
and to fulfill our aspiration to access the tender market. We
will try to carry out some global clinical trials here to make it
easier and faster to get COFEPRIS approval. The regulatory
environment is extremely dynamic and COFEPRIS does not
depend on others to approve its decisions. It is self-sufficient
and it knows the countries’ needs.
Q: Do you have plans to build a plant in Mexico to bolster
your chances of selling generics to the government?
A: To be successful in Mexico there is no one particular
segment or style of operation. The government tender
market is worth around US$2-2.5 billion. We have the
capability to supply to it but we do not have local facilities.
However, there are ways to circumvent this: one is to
manufacture indirectly. It would be a key move from an
investor point of view.
Q: Zydus works in generics but is looking at biosimilars
and vaccines. Which strategic therapeutic areas interest
you most?
A: Zydus started as a generics company but its unique
distinction from other Indian pharmaceuticals is that it is
the first company to register a new chemical entity (NCE).
Saroglitazar, used to treat diabetic hyperlipidemia, was
launched in 2013 and we are looking to commercialize it
globally under the name Lipaglyn, starting with a handful
of countries including Mexico. The second area we are
considering entering is biosimilars and vaccines. We started
working on this as few companies will provide a portfolio to
the extent of over 20 biosimilars and around 20 vaccines.
Some of these products have already been launched in India
and they will be taken to other emerging markets.
Q: What is the company’s strategy to carve out a bigger
slice of the Mexican market?
A: Zydus is a new entrant in Mexico and we are keen to scale
up our operations. There are various options to do so and to
become relevant to the market. We entered Mexico in 2013
and we want to grow both organically and inorganically.
There are few trillion-dollar economies in the world and so
Mexico is a huge opportunity. If any global generic company
wants to increase in size and importance, it must have a
presence in the larger markets and Mexico is the 11th largest
pharmaceutical market in the world.
Q: What strategy did introducing the CNS portfolio to
Mexico correspond to?
A: We initially explored various areas as CNS is not one
of our major business lines. Overall, we have strong lines
in gynecology, respiratory, cardiology and diabology, but
not CNS. However, CNS is in the top five chronic diseases
and the area is growing. Looking at health indicators,
depression is classed among the top five, which is rare for
an emerging market such as Mexico. We found that CNS
could be important for us and our decision was the right
one, so we are confident we will continue to see growth.
Q: Zydus aims to be a research-based company by 2020.
What roles will CNS and Mexico play in this?
MEXICO PROVIDES ROOM TO GROW
MS NAGENDRADirector General of Zydus Pharmaceuticals
VIEW FROM THE TOP
Zydus Pharmaceuticals is an Indian generics laboratory, part
of Cadila Group. In Mexico, it offers solutions mostly in the
CNS area and hopes to soon commercialize biosimilars and
vaccines, becoming a research-based company by 2020
100 which means that private insurance policies are increasing
and are becoming a benefit some companies provide to
their employees in Mexico. In fact, IMSS is looking to apply
an integral model wherein private clinics participate because
it is spending too much on diabetes, cancer, CNS and other
chronic diseases.
This is the next step for the healthcare system, to look at
privatization or semi-privatization for the most concerning
diseases. Patients who need dialysis and hemodialysis
consume 45 percent of IMSS resources and they are a very
small population. Two million to three million require dialysis,
whereas the remaining 45 million IMSS beneficiaries require
other services. We want to reach the private market because
there we can promote the new model of doctor’s offices in
pharmacies that many prefer because it is cheap, fast and
closer to the pharmacy.
Q: In 2015 the private market accounted for 40 percent of
Wockhardt’s business. How did this evolve during 2016?
A: Now it is more. In 2013, when I started operations in
Mexico, the government market was 70 percent of our sales
and private market sales were 30 percent. This number has
changed over the years and in 2016, 60 percent was private
and 40 percent government. We made this change because
the government has an issue with payments, so for us it was
better to secure our income through these sales.
Q: What security measures do you use to protect the chain
of custody?
A: In the pharmaceutical industry, we must be as vigilant as
banks. It is important to assure that those who buy products
get originals, so we take protective measures with tablet
packaging. We put the batch number and expiration date on
a special foil. Also, we apply a hologram in the middle and we
want to put a QR code on the boxes so when the patients scan
it with their phone, the doctor’s name and dose should appear.
These tools are important because without them there is a risk
of medicine ending up on the black market. The authorities do
nothing about it. This personal approach is important in areas
like diabetes because you need to handle insulin carefully.
A bigger dose can put the patient in a coma and a smaller
Q: What is Wockhardt’s main area of focus for new products?
A: Wockhardt Latin America and especially our branch in
Mexico is focused on three big areas: diabetes, CNS and
antibiotics. Last year we launched two drugs for diabetes:
human recombinant insulin and oral anti-diabetics. For CNS,
we developed a product for epilepsy, which in Mexico is
increasing by 12-14 percent each year, and released a product
for depression. The third area is antibiotics. Wockhardt
performs clinical R&D of new chemical entities and we have
at least nine of these developed at our sites in India, Europe
and the US, where we have at least two products in phase
III. The others are in phase I and II but with a really good
performance, so they will probably be released in 2020 or
2022. We are now launching three generic antibiotics. We
want to first build our base with generics and then establish
our own products in the market.
Q: Is there still resistance to generics in Mexico or are they
now accepted by consumers?
A: The market penetration for generics is increasing as more
people make their own purchasing decisions. Pharmacists
can let customers choose between a brand and a generic.
People are selecting the generic because of the price but in
the generic market there are three differentiation points: price,
quality and efficacy. These are fulfilled in the Mexican market,
which gives people the perception generics are as good as
branded medicine.
Q: To what extent do you participate in government tenders?
A: For many national companies, especially those focused on
generics, the tender market is where most of the opportunities
are but at Wockhardt we are focused on the private and semi-
private sectors. Tenders might give the perception that the
government is the biggest market but we need to realize that
most of the money is in the private sector. Most of us will never
go to an IMSS hospital. We prefer to go to a private hospital,
BUILD GENERICALLY FIRST THEN ESTABLISH BRANDSFRANCISCO HERNÁNDEZVice President Latin America of Wockhardt
VIEW FROM THE TOP
Wockhardt is a pharmaceutical and biotechnology company
headquarted in Mumbai, India, providing high quality
medicines. It has relevance in the fields of pharmaceuticals
and biotechnology
101
the Andes region, Ecuador, Peru and Venezuela; from Brazil
we reach Uruguay, Argentina, Paraguay and Chile and from
here we control Mexico and Central America. We have many
customers and partnerships in these countries, all focused on
diabetes, CNS and antibiotics.
Q: How does having a COFEPRIS authorization for your plant
help you expand?
A: Definitely. Having authorizations in big countries like Brazil,
Mexico and Colombia helps because COFEPRIS, the National
Agency of Sanitary Vigilance (ANVISA) and the National
Institute of Medicine and Food Vigilance (INVIMA) are
ministerial authorities, which the rest of the region is looking
for best practices.
Q: What new products do you have in the pipeline?
A: This year we are launching a generic insulin drug, glargine,
to treat diabetes. It is long-acting and gives the patient better
control of the treatment because it provides them a 24-hour
insulin dose in one shot, eliminating the need for two or three
shots per day. We are trying to improve the performance of
the drugs and control of the disease.
The company will introduce another four generic antibiotics
and is looking forward to developing a clinical trial for two
new chemical entities at a nutrition institution and an IMSS
hospital. As for CNS, we will try to register more drugs in the
epilepsy and depression segments.
dose can cause a diabetic shock. We are trying to move to
personalized service and sell to patients directly.
Q: How can you sell directly to the customer?
A: To do that, it is necessary to create a relationship
between specialized centers and the patient, and to use
an app that can provide client information. If government
tenders become a system where patients are referred
to associations or clinics, it is possible to provide a
personalized service through a database.
Q: What time frame are you considering for this innovation?
A: This is going to take three or four years to develop.
An example of this is the Mexican antidiabetic center
in Guadalajara, which is the government’s first attempt
at a semi-private service. The government referred at
least 30,000 patients to the center for integral diabetes
treatment. Patients consult with a physician, nutritionist
and physiologist and the medicines are paid for by Seguro
Popular. This is a model the government wants to scale up
across other states early next year.
Q: What expansion plans are in Wockhardt’s future?
A: Wockhardt’s expansion in Latin America started in 2014.
Today, besides Mexico, we have an office in Brazil and are
looking to open one in 2017 in Colombia. These will be our
three LATAM offices, because those are three big countries in
the pharmaceutical industry. From Colombia we can handle
Wockhardt is a Mumbai-based global research-oriented
pharmaceutical and biotechnology organization that
manufactures vaccines, APIs and generics. It has a marketing
presence on all five continents and has plants in the US, Europe
102 will launch four patented products next year that we will
manufacture in Toluca.
Q: Accord Farma is present in over 70 countries. How
important is Mexico for its global sales?
A: Mexico contributes around 1-1.5 percent to Accord’s US$2
billion global sales. There are plans to increase this, which
is why we have invested in the biotechnology plant here. In
the next three years, we will add around 80 products to our
portfolio, from 62 now, and we expect the Mexican branch to
be a MX$1 billion (US$55 million) company by 2021. These
new products will be across generics, oncology and our
hospital line. The latter already includes 10 products and we
will be adding 20-30 products. The hospital products include
our anesthesia line and we have just launched two new
anesthetics, with three more coming by June 2017. Although
our hospital line does include some niche products, we will
be focusing on high-volume products because they will
boost our presence and help us grow rapidly. In oncology,
we focus on oral therapy and hematological injectable
products because there is less competition in this market.
Q: What are the company’s plans to enter other Latin
American markets?
A: We have already selected a portfolio of around 15 products
to be sold in Latin America. In the near future, Accord Farma
will be exporting to most Latin American countries. We will
increase our plant’s capacity in the first half of 2017 by 30-40
percent and by 2018 at least 10 molecules will be exported to
at least two to three countries. By the time this is completed,
stability studies will have been carried out and we will be fully
ready to export. We will rely more on CM but if after 2018
we require more plants then we will build them. A plant can
be built in a year.
Q: What have you learned from other generics markets and
how is that applied to Mexico?
A: Actually, many of the strategies we implemented in Mexico
were copied elsewhere. Globally, the company is known for
CNS drugs, which we did not implement here. We chose
oncology, which other countries are now copying and
globally there is now a large pipeline of oncological products.
Q: Accord Farma promotes itself as a fast-growing
generics company. What is your growth rate and how will
you sustain it?
A: We work in specialty medicines, oncology mostly.
We grew by 40 percent in 2016 in Mexico and we intend
to grow by a similar margin next year through our
biotechnology facility in Toluca, which will begin operating
in July-August 2017. We are adding new molecules,
which will ensure our continued growth and we expect
biotechnological products to boost this further, with a
30-40 percent year-on-year increase expected in that
segment. The biotechnological facility will produce mostly
oncological products. Around 15 percent of our revenue
comes from biotechnological products.
We are among the top three companies for oncological
products in Mexico in the private generics segment. We sell
seven or eight molecules to the government and oncology
is our core business here. We are not actively seeking to
increase government sales — we want 33 percent of our
business to go to the government and we are maintaining
this percentage. The advantage of this strategy is that as
government business is acquired year by year, even if we
lose a tender we will not suffer that much.
Q: What is the strategy behind manufacturing solely your
oncological line in Mexico?
A: We import around 80 percent of our products but we
know that the future also lies in manufacturing locally. We
chose to produce oncological products because those
require a smaller manufacturing facility with high potency,
while other products are sold in high volumes, requiring a
large plant, which involves high costs. Therefore, we are
choosing niche products to manufacture locally and we can
go down the contract-manufacturing (CM) route for others.
We already manufacture four oral generics this way and we
AGGRESSIVE GROWTH FOR INDIAN PHARMASANDEEP BANEDirector General of Accord Farma
VIEW FROM THE TOP
Accord Farma is an Indian-based generics company that
entered Mexico in 2006. It has three lines: Onco Care, Farma
Care and Cliniq Care. Oncological treatments are its primary
focus in Mexico
103
INSIGHT
Generic medicines are on the way up in Mexico, forcing
changes on Big Pharma that are reshaping the market,
says Arístides Salazar, General Manager of Mexico,
Central America & the Caribbean Region for Emcure
Pharmaceuticals, a company that works in R&D and
manufactures for leading companies such as Roche.
“The golden years of Big Pharma are over and the entrance
of generics has changed the game,” Salazar says, adding
that “the future of the industry besides genomic medicine
is in biosimilar drugs and generics.”
According to Deloitte’s 2016 Global Life Sciences Outlook,
generics were expected to reach 36 percent of health
spending by 2017. “In Mexico, around 80 percent of
medicines in terms of units are generics,” says Salazar, which
he attributes to the high volume purchased by the public
sector in tenders and due to their low-price points. “The
problem with Big Pharma companies is that the process of
decision-making does not take place locally, which means
decisions must be taken at higher levels of the corporate
ladder, thus delaying negotiations. Emcure’s ideal is to have
a flexible business without ruling big companies out.” Its
flexible approach allows the company, which manufactures
chiral molecules, generics, biosimilars and novel drug-
delivery systems, to adapt to the markets it enters. “The top
priority is to consolidate the Mexican subsidiary by taking
advantage of the opportunities we have here,” he says.
The company has no manufacturing plant in Mexico. With
no FTA between Mexico and India, it is licensing out the
production of its medicines to other companies. “There are
several companies with unused capacity that are looking
to manufacture for other companies,” Salazar says. Emcure
considers entering alliances with those companies, although
it may invest in building or acquiring a manufacturing plant
once it has reached sufficient critical mass in sales. “Then,
we could harness distribution to the US and the rest of Latin
America and the Caribbean,” he adds.
Emcure aims to introduce revolutionary products to the
Mexican market, to start taking part in public tenders and
to sell its products locally under its own brand name. “If
we can support Mexican health with accessible and high-
quality products, we must do it,” says Salazar.
Alliances are key to the company’s market penetration
in Mexico because they allow the company to insert its
products into the portfolios of its partners. For example,
Emcure has licensed out its gastrointestinal product
Gamo (Levopantoprazol) to Sanfer, one of the largest
Mexican generics players. “Our company has at least four
other partnerships under development,” said Salazar.
In Mexico, the most important segments for Emcure
are gastrointestinal and cardiovascular. However, it
works a series of therapeutic sectors at the global level
with distinct production lines focused on each target
country’s needs. Emcure’s global portfolio includes HIV,
oncology, biosimilar drugs, diabetes, gastrointestinal,
cardiovascular and painkillers, among other areas.
“Diversification enables Emcure to adapt to the needs
of the market and customers and to the portfolios of our
partners,” Salazar says.
The company looks forward to eventually participating in
the diabetes segment with an integral portfolio of related
products, as therapeutics for diabetics mkae up one of
the biggest sectors in the global pharmaceutical market,
especially in Mexico. Its portfolio includes modified
molecules and innovative combinations that reduce
cholesterol levels and thus the chance of cardiovascular
arrest in diabetic patients. Emcure expects to start selling
its products under the Emcure brand in three to four
years. Building a manufacturing plant is a possibility in
five to 10 years but its short-term priority is to consolidate
partnerships and to start the registration process for its
products.
ALLIANCES CREATE A PATH TO GROWTH
ARÍSTIDES SALAZARGeneral Manager of Mexico, Central America & the Caribbean
Region for Emcure Pharmaceuticals
“In Mexico, around 80 percent of medicine
units are generics”
105developing products and brands that best fit each of their
strategies. Even smaller pharmacies have varying strategies.
Some sell from behind a counter like traditional pharmacies,
whereas others are more like mini-supermarkets where you
could even buy groceries and other convenience items. This
is a model more often seen in the US but it is a growing
trend in Mexico.
Q: How much more receptive are Mexican consumers and
authorities to products from a US-based company than
from other countries?
A: Perrigo has a significant footprint in Mexico with four
state-of-the-art manufacturing sites. The vast majority
of our products are manufactured locally and all have
marketing authorizations from COFEPRIS. I am not sure
that consumers make any distinction between local and
imported products but both retailers and consumers have
confidence in our quality and service. The big change in
recent years has come from the growing confidence in
generics by Mexican consumers. Every day, more and
more people prefer to buy generics vs brands, with full
confidence that the quality and therapeutic effect will be
the same but at a much more affordable price.
Q: How important is Mexico for Perrigo globally?
A: Our business in Mexico is extremely important to
Perrigo's global operations. Not only do we share a very
similar business model with the US branch of Perrigo, but
we service many of the same strategic customers that have
presence on both sides of the border. We have identified
Mexico as the country in Latin America with the greatest
potential for growth as the economic and demographic
conditions are very promising for our industry. We believe
that each day there will be more opportunities to develop
significant supply chain partnerships between our countries
due to NAFTA.
Q: What does innovation entail for a company focused
on generics?
A: For us, innovation has to do with effectively developing
high-quality and affordable generic versions of drugs
whose patent has or will expire. To achieve this, we
must develop the products our customers require, file
for approval from local health authorities and do our
best to be first to market. Another source of innovation
comes from our business model, as we develop strategic
partnerships with our customers to launch their private
labels. Retailers do not have manufacturing and we are
manufacturers without stores.
Q: Perrigo now owns NiQuitin. How popular are these
tobacco-replacement products in Mexico?
A: NiQuitin is a great brand and a very effective treatment.
Unfortunately, we found that NiQuitin had been somewhat
neglected in the Mexican market and there were many
out-of-stocks resulting in many consumers not being able
to continue their treatment. However, we are correcting
those supply issues and customers are now able to stock
the products. There is a global trend to stop smoking
and Mexico is not the exception. Recent legislation is
making it harder to be a smoker and there is a growing
trend toward wellness that has made people more likely
to drop the habit.
Q: How are your products distributed between the public
and the private sectors?
A: The public sector represents around 15 percent of
our sales and we sell only through distributors and only
specific products. In the private sector, we are partners
with large and small retailers in Mexico in the development
of their store brands. Some laboratories focus more on
their own brands and others sell almost exclusively to
the government. We operate opposite to that because
most of our business, capacity and efforts are focused on
manufacturing for our retail customers.
Q: How does Perrigo develop its strategy for each retailer?
A: Each retailer is different, with distinct formats and
specific strategies. Our job is to work with them in
INNOVATING WITH HIGH-QUALITY GENERICS
RICARDO GANEMVice President and General Manager of Perrigo
Perrigo is one of the world’s largest manufacturers of private
label goods for retailers, leading the OTC sector. Founded in
1887 in the US, it has been present in the Mexican market
since 1954
VIEW FROM THE TOP
106
INSIGHT
STRICT RULES FAVOR LOCAL PRODUCTION
In Mexico, the largest single purchaser of generic
medicine is the public sector. It is no wonder then that
increasing sales to this sector is widely seen as a solid
growth strategy. In 2017, IMSS alone spent MX$41.9 billion
(US$2.3 billion) on the consolidated purchases, acquiring
1,371 types of products, 63 percent of which were
generics. However, the tender system favors companies
that have manufacturing plants in Mexico, seemingly
leaving those that do not out in the cold. That is enough
incentive to build and produce locally, says José Díaz,
Executive Director of Indian pharma company Micro
Pharmaceuticals.
“Mexican law states that only Mexico-produced products
can participate in the largest tenders. This is why we want
to construct a manufacturing plant.” There is a profitable
loophole, however: companies that do not produce in
Mexico can sell to the government when larger companies
cannot meet the tenders. “This is what we are doing:
supplying products that are out of stock elsewhere. At
the moment, we can only aim for the crumbs of the cake,
while companies that produce in Mexico take large slices,”
Díaz says.
The consolidated purchasing system often means
enormous savings for the public institutions that
participate, representing MX$3.4 billion (US$188 million)
in 2017. However, Díaz points out that this often obliges
companies to operate at a loss and is not necessarily
better for everyone. “Sometimes the health sector sets
costs extremely low and it seems impossible that the
product could be sold at a price so low it is below the
production cost,” Díaz says.
Micro Pharmaceuticals Mexico is not closed to working
with the public sector and once its manufacturing
plant is up and running, it looks forward to finding new
opportunities, Díaz says.
The Mexican generics market as a whole was worth
US$3.33 billion in 2015, according to Seale & Associates.
Although Micro Pharmaceuticals has almost 500 products
available to purchase in India, only 12 are on Mexican
shelves due to slow regulatory approval.
“We do not know how long it will take to get approval
for the other products,” says Díaz. This means that
Micro Pharmaceuticals Mexico cannot rely on its large
portfolio for sales and growth. Instead, it has created
alliances with pharmacies and national pharmaceutical
laboratories. “One of the alternatives we are looking at
while waiting to gain critical mass is to associate with
national laboratories that can manufacture for us here in
Mexico,” says Díaz.
Micro Pharmaceuticals Mexico is also looking at
pharmacies for allies because they have a great volume
of own-branded products. The company is keen to enter
this segments with the large pharmacy chains, including
those in supermarkets.
An expansion from Mexico to Central America is also in
the works. “We are on the verge of closing a deal with
a Guatemalan distributor and we are participating in a
US$12.5 million tender in Guatemala. We will continue to
look for similar opportunities across Central America,”
says Díaz. The products it takes to Central America will
not be those available in Mexico, as the company adapts
each portfolio to the country’s needs. “What sells in India
will not necessarily sell in Mexico,” he explains.
These countries are easier to enter for foreign companies
because regulation is not as strict as in Mexico. “Whereas
in Mexico we cannot sell a product that does not have
Mexican registration, in Central America a product need
only be registered once, anywhere, to be available for
sale,” Díaz says. In addition, COFEPRIS is becoming
increasingly recognized globally as a regulatory agency
that demands high standards. Díaz believes the company
can compete against the multitude of products available
in less-strictly regulated countries with its high-quality
products produced in FDA-certified manufacturing
plants.
“One of the alternatives we are
looking at while waiting to gain critical mass is to associate with national laboratories that can manufacture for us here in Mexico”
José Díaz, Executive Director of Micro Pharmaceuticals Mexico
107
INSIGHT
For generic companies, the rules of the public purchasing
system have become clearer since the establishment of the
consolidated purchase. However, the low prices paid by
the government in the process have led them to seek more
opportunities in the private sector, says William Escobar,
General Director of Grupo Unipharm, an international generics
company that is expanding to the commercialization of
branded generics in its Mexican division.
“We want to go out with a new sales projection in the
Mexican market. Our corporate structure here is still at a
low level compared to our businesses in the Andes and
Central America. Our vision is for Mexico to represent 75
percent of our operations and make the country our largest
market,” Escobar says.
The company’s main objective with this commercial change
is to go from “quality product at a very low price, to high-
quality product at a fair price,” Escobar says. To achieve this
goal, the pharmaceutical company, founded in Switzerland
and based in Guatemala, is working to restructure its brand
in the Mexican market, where the company’s operations
grew 186 percent over the past year and with growth
expected to reach 300 percent in 2017-2018.
Grupo Unipharm has been in the Mexican market for 20
years and its portfolio is composed of a primary care line,
antitussives, antibiotics, products for women’s health,
minerals and vitamins. In this context, the company is
planning a new aperture to the market with a line of branded
generics to expand private purchases and thus balance its
sales in the public and private sectors, which now represent
76 and 24 percent, respectively. “The essence of Grupo
Unipharm is to be a branded generic laboratory. Now we have
both lines, pure generics for the government and branded
for private companies,” says Escobar. Given the race to the
bottom in terms of prices in the generics industry, Unipharm’s
new line is aimed at chronic diseases, providing solutions for
patients with recurrent cardiometabolic conditions such as
hypertension, diabetes and obesity. There are also products
for CNS, depression and for neuropathic pain. According to
Escobar, this line will help the company migrate to a position
halfway between the generic and the innovative brand. “With
the quality and prices we will bring to the market we want
to create more loyalty with patients and show the medical
community that we are cost-effective.”
Besides increasing its portfolio from 36 to 54 products by
2018, Grupo Unipharm’s strategy also focuses on getting
closer to health professionals by sending sales representatives
to visit them face to face. Just like other medium-sized
companies, Grupo Unipharm is pressured by market demand
to be more efficient, faster and better. To meet this demand,
the company is developing plans for the construction of a
new plant in the State of Mexico that will manufacture solid,
liquid, semi-solids and sterilized drugs. The plant will pursue
international certifications to be more functional and dynamic
for the grup's operations in the region.
RENEWING COMMERCIAL VISION IN A COMPETITIVE MARKET
WILLIAM ESCOBARDirector General of Grupo Unipharm
Source: statistica.com with the latest information available
2014 MEXICAN DRUG MARKET SHARE
DISTRIBUTION OF MEXICAN BRAND VS GENERIC DRUG MARKET AS OF 2014 BY UNIT
Retail generic
Institutional generic
Retail brand generic Institutional
original brand
Original retail brand
DISTRIBUTION OF MEXICAN BRAND VS GENERIC DRUG MARKET AS OF 2014 BY VALUE
Retail generic
Institutional generic
Retail brand generic Institutional
original brand
Original retail brand
By value By unit � 45.2%
� 20.2%
� 15.2%
� 10.2%
� 9.2%
� 59%
� 17%
� 14%
� 8%
� 2%
� Patented brand retail sales
� Branded generic retail sales
� Non-branded generic retail sales
� Generic institutional sales
� Patented brand institutional sales
109
Mexico has great potential for medical device manufacturing. Baja California has
become a cluster for many international brands attracted to the quality human
capital and low operating costs in a strategic location. According to Global
Health Intelligence, more than 4,000 people are employed in this manufacturing
hub. Technological development is driven by the aging population and the
widespread prevalence of age-related conditions such as hearing problems,
mobility issues, cardiovascular and CNS conditions. Another driver is the
burden of chronic diseases that suggest the development of devices that aid
people with cancer, diabetes and lung diseases. Innovation has mostly focused
on facilitating treatment and early diagnosis, which is key to improving quality
of life and the rate of successful outcomes.
Medical devices come in all shapes and sizes and this chapter will provide an
overview of devices big and small. From the production of MRI machines to
surgical equipment, from wound care to pregnancy tests and heart valves
to knee replacements, all will be discussed in this section. It will showcase
interviews from the companies that make these devices and will focus on their
role in the Mexican healthcare system and the regulatory challenges they face.
MEDICAL DEVICES
5
111112 ANALYSIS: Good Manufacturing Picture Helps Overcome Economic Challenges
114 VIEW FROM THE TOP: Mauricio Valero, Linet Group SE
116 VIEW FROM THE TOP: Javier Giraud, Fujifilm
117 VIEW FROM THE TOP: Juan Pablo Solís, Becton Dickinson
119 VIEW FROM THE TOP: Francisco Morales, 3M
120 VIEW FROM THE TOP: Martín Ferrari, Dräger
121 VIEW FROM THE TOP: Alejandro Paolini, Siemens Healthineers
122 VIEW FROM THE TOP: Nelson Valenzuela, Arthrex
123 SPOTLIGHT: SynergyRF System with ApolloRF Probes and SynergyUHD4 System
124 INSIGHT: Germán García, Smith & Nephew
125 VIEW FROM THE TOP: Fernando Oliveros, Medtronic
126 INFOGRAPHIC: The Medical Devices Segment in Mexico
128 VIEW FROM THE TOP: Carlos Jiménez, B. Braun Aesculap
130 INSIGHT: Ulises Bacilio, Grupo PTM
131 VIEW FROM THE TOP: Zaid Badwan, MediPrint
CHAPTER 5: MEDICAL DEVICES
TMTMTM
112
GOOD MANUFACTURING PICTURE HELPS OVERCOME ECONOMIC CHALLENGES
“The prices are also low so they are not
sustainable in the long term. We can offer
those prices for one year but not several years
running, especially with the depreciation of
the Mexican peso against other currencies.
This is not sustainable and endangers quality,” said Martín
Ferrari, Director General of Dräger Mexico. Ferrari says
the first step should be for the government to understand
the value of complete solutions and then change the
model to purchasing based on specific therapeutic needs.
He believes that government purchases of equipment
from different brands for a surgical room will then require
different maintenance teams, different guarantees and
different providers. If it buys integral solutions, there will
be more guarantees, he believes.
OUTSOURCED MANUFACTURING
Despite the economic difficulties, foreign companies
are tapping into Mexico’s strong potential as a base
for outsourced manufacturing of both medical devices
types classified by CANIFARMA: Supportive Products
for Health (PAPs) and Reactive and Diagnosis systems
(RSD). According to CANIFARMA, PAPs are widely
produced in Baja California and, based on ProMéxico
data, the northern state has become a cluster for many
international brands, mostly from the US and Europe,
attracted by low operating costs in a strategic location
and quality human capital for manufacturing. In fact, the
US provides 70 percent of the firms based in Tijuana and
Tecate and 86 percent of the top investors, according to
ProMéxico.
Mexico generates US$8 billion in medical devices exports
and 92 percent of those exports go to the US, says Edgar
Romero, President of AMID. Broken down by product,
Mexico is the third global exporter of tubular suture
needles and the fourth for instruments and devices for
medicine, surgery, dental and veterinary health, based
on ProMéxico data.
According to INEGI Mexico is home to approximately
400 exporting companies, most of them focused in the
manufacturing industry. INEGI data also shows there
are more than 2,500 economic units specialized in
medical devices in Baja California, Tamaulipas, Sonora,
Nuevo Leon, Mexico City, Jalisco, State of Mexico and
Coahuila. In addition, ProMéxico predicts that by 2020
the production of medical devices in Mexico will reach
US$25 billion.
In November 2016, the Mexican peso became a victim
of the US elections. Before voters went to the polls, the
already-weakened currency was at MX$18.5 per dollar.
By the time the votes were counted, the peso had sunk
to MX$20.74, a historic low against the US currency that
pushed up prices of imported goods. Coupled with lower
oil prices that forced government budget cuts, medical
devices companies have increasingly turned to the
private sphere to support their bottom lines.
“We gained market share and we grew above the market
but it was difficult because of the peso’s devaluation
against the US dollar and cuts to public budgets due to
the drop in oil prices. However, our growth was stable
thanks to the private market, which continued to invest
despite the fact that the public market contracted,”
says Alejandro Paolini, General Manager of Siemens
Healthineers Mesoamerica.
As the government trimmed its budget, it also offered lower
prices for products. In 2016, the Ministry of Finances and
Public Credit rolled out a series of cuts, slashing its budget
in February by MX$132 billion (US$7.3 billion), in April by
MS$175 billion (US$9,7 billion) and in September by another
MX$239 billion (US$13.2 billion). Among the top targets were
health and education, which had a direct impact on the
purchasing capacities of health institutions. The consolidated
purchase system has helped the government to continue
purchasing supplies and drugs while saving money. Since
2013, IMSS has saved MX$14 billion (US$777 million) through
the scheme, said IMSS Director General Mikel Arriola in 2016.
Companies have few qualms about the system, believing
it a good government initiative; however, they say the
purchases should be oriented toward integral acquisitions
by therapeutic areas instead of individual products that, sold
at low prices, are not profitable.
ANALYSIS
Over the last year, the medical devices industry has
faced challenges from currency depreciation to budget
cuts that have forced it to make the most of the Mexican
manufacturing industry’s capabilities
Mexico generates US$8 billion in medical
device exports and 92 percent of those
go to the US
113
will increase investment in innovation because less time needs
to be spent on other things,” says Romero.
In addition to local incentives for the medical devices industry,
Mexico still has room to boost its position in the outsourced
manufacturing sector. ProMéxico's Sector Diagnosis study for
the medical devices industry suggests the main obstacles to
development are a fragmented and bureaucratic healthcare
system, a low expenditure in health per capita and a lack of
trained staff in health institutions to use the technology. “The
medical devices market in Mexico is underdeveloped, which
means there are many opportunities to grow,” says Germán
García, Director General of Smith & Nephew, a UK company
specialized in wound management and orthopedics.
According to the study Medical Devices Outsourcing
Market 2016-2020, the global outsourced manufacturing
industry is growing at a compound annual rate of 11 percent.
A study developed by Technavio showed that the major
reasons for outsourcing are “gaining specialized expertise,
harnessing a high supply chain, avoiding issues such as high
manufacturing costs and overcoming capacity constraints.”
AMID’s Romero says the government faces the challenge
of how to evaluate the new devices and ensure that the
most innovative medical devices reach patients. “Now,
from releasing a product to releasing its next generation,
there are only two or three years and the evaluation system
for new products is not used to working with such short
time frames. Medical devices account for 70-80 percent
of sanitary registrations in Mexico. How to evaluate them
and the cost/benefit over time is a new challenge for any
government, including Germany and the US. The main
challenge is bringing these devices to the country.”
Adding to Mexico’s attractiveness is the pool of human
resources available to companies looking to establish
manufacturing sites in Mexico. According to Global Health
Intelligence, more than 4,000 people are employed in
the Baja California manufacturing hub. US-based health
technology company Becton Dickinson, which focused on
IV devices for drug administration, is among those taking
advantage of the country’s talent. “Of BD’s 45,000 global
associates, 9,500 are Mexican, or nearly 20 percent. They
are distributed throughout our operations in Mexico City, San
Luis Potosi, Sonora and Baja California. We export products
made in Mexico to the US, Asia, Europe and the rest of Latin
America,” says Juan Pablo Solís, Vice President and General
Manager of Becton Dickinson Mexico, Central America and
the Caribbean.
Mexico’s strategic location, with access to the Latin American
markets as well as the US and Canada, is attractive for
European companies, such as global supplier of hospital beds
Linet Group SE. “To ship beds from the Czech Republic to
Chile takes two and a half months. The entire Pacific coast
is far from Europe, so a Tijuana plant (which Linet plans to
build) would benefit these countries, especially Peru and to
some extent Ecuador,” says Mauricio Valero, the company’s
Managing Director in Mexico.
The process for approval of medical devices has also improved
after COFEPRIS decided to deregulate certain accessories.
AMID is responsible for 80 percent of COFEPRIS’ sanitary
registers and the association’s President believes the
decision to deregulate some items ultimately will lead to
more investment. “Deregulating these items is good because
COFEPRIS can use its time to check true technological
innovations instead of regulating these other products. This
Categories of medical devicesClassification of medical devices
according to the risk implied by their use
Medical equipment: apparatus, accessories and instruments that have a
specific use and are intended for surgical or exploratory procedures, diagnosis,
treatments, rehabilitation or for biomedical research activities.
• Class I supplies for which security and
efficacy is approved and that are
not introduced inside the body.
• Class II might have variations in
concentration of the material they
are made from, usually they are
introduced inside the body for less
than 30 days.
• Class III supplies recently approved for
medical practice that are introduced
inside the body and stay in for more
than 30 days.
Prosthetic, orthosis and functional aids: devices intended to replace or
complement a function, an organ or tissue.
Diagnosis agents: all supplies, including antigens, calibrating antibodies,
controls, reactive, reactive equipment, crop and contrast tools and any others
used as aids for other clinical or preclinical procedures.
Supplies for dental health: all tools and substances used for dental health.
Surgical and healing materials: devices and materials that with or without
antiseptics and germicides that are used in surgical practice or in treatments of
continued use.
Hygienic products: materials and substances that are applied to the skin or
cavities that have pharmacological or preventive purposes.
Source: COFEPRIS
114
Q: How is your business divided between the public and
private sector?
A: The public sector’s contribution in terms of medical
devices is much more important. As of 2016, the public
sector accounted for around 60-65 percent. Our business
model does not include direct sales; we work only with
distributors and we reach most of the public sector. This
is part of our strategy to serve the market in the best
way possible. Distributors are much better at navigating
the public market. Hospital chains, the main contributors
to the private market, know that they would not receive
a high degree of added value from local distributors so
they prefer to do business directly with a company if it is
located within the country. Private sales do happen and it
is an area of business we are looking to further develop
in the future. Our range of products is the same for both
sectors and globally. There is no difference between
developing countries or mature markets. If people need
a solution then it must be offered to them, even if it costs
a little more.
Q: What is the company’s strategy in the face of public
sector budget cuts?
A: Fortunately, our products suffer less from budget cuts.
Cuts tend to affect the entire construction of a hospital
rather than our business, which comes mostly from new
hospitals. Because information pertaining to new hospitals
is widely available, we can begin working in advance to
position our products. The past two years have not been
easy for the medical devices industry in general but they
have been fantastic for us. This is our third year of operations
here as a subsidiary and Mexico is our most important
market in north Latin America. In our first year, we sold a
little under €2 million B2B, €4 million the following year and
an estited €8 million in 2016. This is exponential growth and
we hope it continues.
Q: What is behind the company’s strong growth?
A: One factor is the product itself. It is of high quality
and produced in the Czech Republic, which in terms of
manufacturing costs has many similarities with Mexico and
both have a high-quality labor force. Manufacturing in the
Czech Republic has been recognized for many years for its
excellence in cars, trucks and heavy equipment. Beds are
no exception. There are two manufacturing centers, one
in Germany and one in the Czech Republic. The quality
control we gain by manufacturing the product under one
roof and our competitive pricing also contribute to the
product’s success. In addition, we sell in Mexican pesos,
not in a hard currency. This is an important part of our
financial work here, which improves our profitability. There
are two major global companies selling these products,
both from the US, and they are comfortable in their
positioning. Linet Group SE is surely the third biggest
producer globally. Our solid marketing, our strategy and
the experience of our employees helped us make the right
decisions when establishing our model. Picking the “low-
hanging fruit,” as the Americans say, has helped us grow
quickly. We do not have national coverage and we do not
have a presence in the most remote areas. There are many
areas yet to be explored, such as our German beds for
geriatric or chronic care. This is a market that is opening
as there are many retirement homes opening, especially
for those with greater economic resources.
Q: What is the potential in Mexico to explore this new
market opportunity?
A: The retirement-home market will grow greatly, amid
an increase in the elderly population and in chronic-care
patients and as the number of children to look after their
parents decreases. We need general guidelines for this
area and companies like ours must create the appropriate
models. The National Institute of Geriatrics (ING) is starting
to operate public centers for this type of care, but the states
are not sure what infrastructure they should offer. The private
side is developing again, although it is a little disorganized.
Some homes have high standards and are very expensive
while others only offer shared rooms with no professional
care, furniture or fittings. A multidisciplinary team with
nutritionists, a geriatrician, nurses and the adequate
equipment are required. We are focusing on geographical
areas that are agreeable to retirees, especially areas that
have a large economic capacity such as popular tourists
spots like San Miguel de Allende or Baja California.
HIGH-TECH BEDS SECRET TO GOOD HOSPITALSMAURICIO VALEROManaging Director of Linet Group SE in Mexico
VIEW FROM THE TOP
115
clients a larger range of products. Borcard specializes in
birthing beds, which is in line with our vision to provide
quality care for women in labor. I believe this is an intelligent
and logical acquisition.
Q: What are the company’s plans going forward?
A: Our growth in Mexico, Latin America in general and in
the US is good. Linet Americas sold almost US$50 million
of beds. This is the market where the world number one and
two of the sector are from so it shows promise. The beds are
shipped from the Czech Republic so we have a disadvantage
on delivery times compared to the competition. It was
decided that we will need to find somewhere to put another
factory when the time and the sales volumes are right. At
the end of 2015 we went on a commercial and diplomatic
mission to Tijuana where there is an important cluster and a
number of companies producing medical devices. There is
a well-developed logistics chain there and the possibility to
have three ports for exportation: two to Mexico and one to
the US. There are advantages that are not found elsewhere
in the Americas and so it is practically decided that Linet
Group SE will build a factory in Tijuana. Global political
uncertainties combined with the Mexican election campaign
can delay projects. We will most probably see a few years
that are not so dynamic. Although this sector is a little
more immune to these factors, it will surely be affected to
some extent.
Q: What other countries in Latin America does Linet want
to expand to?
A: To ship beds from the Czech Republic to Chile takes
two and a half months. The entire Pacific coast is far from
Europe, so a Tijuana plant would benefit these countries,
especially Peru and to some extent Ecuador.
We also hope to increase our number of technicians and
clinical specialists. Because our beds are made in the Czech
Republic, they are designed with the strictest security
standards in the world. In 2012, the previous security
standard of 1998 was updated and our competitors in the
US have not yet adopted this stricter standard. It means
the beds support a little more weight, are a little taller and
are less likely to collapse. Measures have been put in place
to ensure that a patient’s extremities cannot be trapped
by the bed. The number of accidents that occurred in beds
was high, which is why this standard was adopted. Our
competitors have bought factories in Europe to sell to that
market, instead of updating their own factories.
Q: How is innovation shaping Linet’s offering?
A: Our intensive therapy beds are extremely important
medical devices for a patient’s hospital stay. The first
challenge is making people understand that this is not
a piece of furniture. It is a medical device that can cost
up to MX$1 million (US$55,000). That is a lot of money
and technology but the goal is for a patient to have the
best quality of life possible. One of our most important
innovations with this bed is the possibility to offer
automatic lateralization therapy because its construction
allows it to move laterally and to incline. In this way, a
serious disease called ventilator-associated pneumonia
can be avoided. This disease occurs in intensive-care
patients who are immobile. It is much simpler to avoid
this disease, which is costly and prolongs the patient’s
care, increasing the burden on the public sector.
We also have a line of active mattresses built around
plastic cells filled with air. The part in contact with the
patient’s body inflates and deflates, preventing the
patient from developing pressure ulcers. These are
serious wounds that are caused by immobility and are
expensive to treat. There are protocols in place to avoid
these pressure ulcers but there may be cases in which
the nurses cannot move the patient because they are too
heavy, for example.
Q: How can this technology help address the scarcity of
beds in Mexico?
A: The idea is to reduce as much as possible the length of
a patient’s stay in more complex and expensive areas such
as intensive care. There are not enough beds in Mexico,
which has a deficit of at least 20,000-30,000 beds. If we
can free up beds in complex areas through technology,
more patients can be treated and moved to less complex
areas of hospitalization. Another trend that could arise is
an increase in home care.
Although there is much to be done, the situation is
improving. We differentiate ourselves through aftersales
services. Beds are medical devices, not furniture, and they
require maintenance. As far as I know, we are the only
company with a clear aftersales service strategy. We also
have personnel specialized in clinical applications. We
provide thorough training to all that will be in contact with
the beds. Services such as how to clean and dry the beds
seem simple, but the useful life of a bed can shrink due to
something simple being ignored.
Q: How will the acquisition of Borcard impact Linet’s
Mexican operations?
A: We were previously collaborating with the company
because it complemented our product line and now we
have decided to acquire it. It is much simpler for us to offer
Linet Group, based in the Netherlands, is a supplier of high-tech
hospital and nursing beds for over 100 countries worldwide.
The Linet range also includes accessories such as anti-pressure
ulcer mattresses, mobile equipment and healthcare furniture
116
Q: What solutions do you offer in Mexico? Who are your
key customers?
A: There are five great subdivisions in which we are
working but imagenology is the most important for us. In
this division, we sell the only 50-micron mammography
machine on the market able to perform tomosynthesis and
enhanced-contrast mammographies. Over 400 hospitals
and clinics are fully integrated through our medical IT
division, either through the cloud or individual clouds.
To this end, Fujifilm just released its newest product
globally: Vendor Neutral Archive (VNA) software, which
fully interconnects hospitals and their departments. Our
endoscopy division participates in tenders for both IMSS
and ISSSTE, because these institutions perform many more
endoscopies than the private sector. The fifth division is
ultrasound, an area in which we are highly specialized and
which produces Sonosite, our key product.
Q: What value does VNA software offer the health industry?
A: VNA interconnects hospitals within a system to produce
the complete medical profile of a patient, including the
results of medical tests, and provides it to the physician.
It would be complicated for a single software supplier to
provide all required solutions in this category to IMSS,
the second-biggest health institution worldwide. I think
the best choice is not a single unified system for every
physician but rather there should be an appropriate system
for each physician and the chance for that system to be
interconnected with the rest. Telecommunication companies
will be Fujifilm’s allies during the entrance process of VNA
and therefore we work hand-in-hand with them. We have
signed a commercial alliance with Telmex. We have the
know-how, but they are aware of the market.
Q: How will Fujifilm manage the Big Data obtained
through VNA?
A: In medicine, there is a smaller amount of Big Data than in
other industries, so we manage it differently. While there is a
high quantity of small data in other sectors useful for creating
statistics, in medical IT we have fewer files, but they occupy
much more digital memory. For example, a mammography
machine is used to produce a final image of around 40MB,
although our latest mammography machine can produce a
final image of over 200MB. If this mammography includes
tomosynthesis, the file is 10 times larger. Finally, the resulting
mammography will be a single file of one gigabyte. Thus, Big
Data must be managed differently.
Digital technology enables the making of thousands of
photographs to produce more precise diagnoses and our
imagenology system can produce four or five thousand images
per test. New technology is needed to process and manage
these images at the rate the physician needs to visualize them.
To meet this need, Fujifilm developed a visualizing platform
called Picture Archiving and Communications Systems
(PACS). This software administers the images and uses a
new platform called DICOMweb. This technology interprets
all the archives it receives and provides better test results in
less time. Mexico invests the least in health in the OECD, with
public spending at US$541 per capita yearly and US$1,052
including both private and public spending per capita per year
as of 2015. About 30 percent of this money will be used for
medicine and the portion left for medical equipment is low.
I think this has been changing lately and we are becoming
less corrective and more preventive. To prevent breast cancer,
Mexico needs to invest in early detection equipment, which in
the long-term will save more money.
Q: Fujifilm invested in cellular regeneration company
Regcell. What are the advantages of such investments?
A: Fujifilm’s value is its innovation and the company does
not want to fall behind. As part of that the company has
been investing in cellular regeneration through companies
such as Regcell. Today, it is possible to send a DNA sample
and receive a piece of skin for healing burns. The goal of
the technology is to develop a cellular 3D printer capable
of printing different kinds of tissue. Tissue and organ
regeneration is where the industry is heading.
INNOVATING IN PREVENTIVE MEDICINE: IMAGENOLOGY, SOFTWAREJAVIER GIRAUDMedical Systems Manager at Fujifilm Mexico
VIEW FROM THE TOP
Fujifilm Mexico is the local subsidiary of Japanese giant
Fujifilm Holdings Corporation. Its medical systems division
comprises the areas of imagenology, endoscopy, ultrasounds,
dry chemistry and related support services
117
Q: How important is Mexico to Becton Dickinson’s global
position?
A: Mexico has long been a successful market for the
company. The country is the second-largest market in Latin
America after Brazil. Over the years we have gone from
being a syringe company to taking up a leading position in
clinical diagnosis, molecular chemistry and flow cytometry
markets. Of Becton Dickinson's (BD) 45,000 global
associates, 9,500 are Mexican, nearly 20 percent. They are
distributed throughout our operations in Mexico City, San
Luis Potosi, Sonora and Baja California. We export products
made in Mexico to the US, Asia, Europe and the rest of Latin
America. Our success in Mexico can be explained through
our commercial and manufacturing history of over 60 years.
Q: How has Becton Dickinson permeated the Mexican
market to ensure continued growth?
A: 2016 was an important year for BD. Globally, it was the
first year we operated with the integration of Carefusion,
acquired in 2015. Carefusion has a strong portfolio of
innovative products and with this alliance, the company
widened its footprint around the world. In Mexico, BD
consolidated its market leadership, focusing on providing
solutions for the country’s main health issues. We are
relevant in key fields such as women’s health and cancer —
we produce the best technology for the early and accurate
integrated diagnosis of cervical cancer. We continue to be
an important player in healthcare worker safety, providing
a wide range of products that make clinical and medical
practices safer for Mexican professionals, and we are
becoming more relevant in diabetes management, with a
large percentage of patients using our specialized syringes
and pen needles for their daily care.
Q: How can BD technology help to improve the effectiveness
and productivity of the Mexican public healthcare system?
A: Many innovative medical device companies, including BD,
offer a set of products that in the short-term may appear
to be more expensive than traditional devices. However,
the new features, such as safety for healthcare workers
and for patients, bring benefits in the long-run for the
healthcare system. If a patient can be treated with state-
of-the-art medical devices, it is more likely he or she leaves
the hospital sooner.
Q: What business models help keep high technology
affordable for the public and private sectors?
A: We work on different axes, first generating local clinical
evidence about the benefits of our innovative products to
the healthcare system, then early adopters among public
and private institutions embed the new technologies. Once
a product is proven to work, the system tends to adopt it
en masse. At Becton Dickinson, we have a wide range of
products that are affordable depending on the need, which
is why we play at different levels of the healthcare system,
following our purpose to advance the world of health.
Q: What is Becton Dickinson doing to support the
digitalization of the Mexican healthcare system?
A: We have several technologies that support healthcare-
system digitalization. Through our solutions for lab
automation, for example, we can connect different
instruments to link clinical results to a lab and a hospital
database. Our value proposition in medication-management
systems can help with drug/patient traceability that is so
badly needed in our country to avoid medication errors.
Q: What type of technology have you developed for the
protection of healthcare professionals?
A: We have developments designed to prevent accidental
punctures. A traditional syringe has a barrel and a needle,
so when nurses give an injection, they are vulnerable to
punctures. With our system, once the injection is made, there
is a mechanism activated by a spring that covers the needle.
These security products have seen great acceptance in the
private sector and we want to show the benefits of this line
to public institutions. Our clinical evidence shows that using
these products greatly benefits the entire healthcare system.
THE ANSWER TO TOP HEALTH CONCERNS: TECHNOLOGY
JUAN PABLO SOLÍSVice President and General Manager of Becton Dickinson Mexico,
Central America and the Caribbean
VIEW FROM THE TOP
Becton Dickinson is a US-based international health
technology company focused on IV devices for drug
administration, cancer diagnosis, diabetes treatment and
cellular research
119
Q: 3M manages a large variety of brands. Which are the
most important in Mexico and what is your added value?
A: We divide our business into five groups, each of which
is responsible for driving brand awareness locally. We want
the same image to be projected in Mexico, China and the
US. I am in charge of healthcare. In this sector, Littmann
is one of our most recognized brands and is synonymous
with quality. Another strategic brand is Tegaderm, which has
been growing globally and is the most important brand in
Mexico in terms of sales. Both Tegaderm and Littmann will
receive strategic investments in 2017. 3M provides added-
value because although a product may be more expensive,
its positive outcome will reduce total healthcare expenditure.
Q: What are the greatest challenges 3M faces in Mexico?
A: The country’s improving life expectancy and increase in
chronic diseases present an opportunity. The more cost-
efficient solutions we can offer, the better the system
will work. One 3M solution helps to prevent infections in
operating rooms, creating savings for patients and hospitals.
An example is a patient’s temperature. The longer patients
are in surgery, the lower their temperature drops, which
puts them at a higher risk of infection and cardiac arrest. A
blood transfusion also increases risk and thus the cost. By
maintaining a patient’s temperature throughout the surgery,
risk and costs are lowered. We estimate that less than 5
percent of surgeries in Mexico happen with a temperature-
management system. This is an opportunity for us.
Q: What strategy do you employ to enter your products
onto the National Formulary?
A: We need to show a positive clinical outcome, the expected
cost and the potential savings. If we add innovation just
for the sake of it, the authorities will not be interested
because it will increase cost without improving clinical
outcomes. If the clinical outcome is positive but does not
generate savings, it will not be accepted. We offer all these
requirements through health-related economic and data
analysis tools that allow us to show an infected patient’s
hospital stay would be longer, increasing overall costs. In
addition, this person is not going to work, impacting family
life. These are direct savings.
Q: What system is in place to track the user’s experience
of 3M products?
A: We have well-established metrics. In hospitals, for
example, we can measure infection rates and their
reduction. This is hard data that can corroborate our
progress. The same goes for hand hygiene. If people
comply, infections are reduced. The same applies to food
safety because we can prove there are no pathogens or
food viruses on instruments.
Q: What are the results of 3M’s work with the Fundación
Carlos Slim?
A: We signed an agreement with the foundation to
participate and collaborate in education through the
healthcare academy, which is an umbrella for any kind
of educational activity. We worked on this with the
foundation and with IBM. Students are eager to learn
about new practices and new technologies and we struck
an alliance with Del Valle University to provide these.
Part of the university’s responsibility is to show students
not only the history of their field but also what they will
encounter on a daily basis in their practice. If students
graduate knowing the latest technology, they can jump
into the workforce right away with the necessary skills.
Q: Which are your main objectives for 2017?
A: In healthcare, we are investing heavily in coverage,
adding more resources to broaden our reach, covering more
hospitals, dentists and areas in food safety. We look forward
to greater growth, considering that the market is expanding
due to chronic diseases. We are focusing on adding more
technicians, providing more education to the market and
more sales reps to reach more people. We look forward to
identifying key opportunities to offer solutions that improve
lives every day through science and innovation. This is our
ultimate and main goal as a company.
3M is one of the world’s largest manufacturers of science
and innovation products. An American company, it is focused
on health, automobile, energy, communications, security,
manufacturing and transportation
INNOVATION SAVES LIVES, LONG-TERM COSTS
FRANCISCO MORALESDirector of the Healthcare Divison of 3M
VIEW FROM THE TOP
120
Q: What have Dräger’s main achievements been in
digitalization since last year? What are you pursuing
through digitalization in healthcare?
A: We had a lot of success with the INCan and we have
integrated five data digitalization systems with electronic
records for critical care areas and the surgical rooms that
use our equipment. At a government level, we still have
the same flows and issues in the compliance process.
However, we have seen the benefits in the institutions we
are already working with. Now, nurses have more time to
focus on patients instead of collecting data on paper. The
doctors can make better and more precise decisions with
the new tools.
Q: What are the obstacles to integrating these solutions
in more hospitals?
A: There is a budget for equipment purchases but the
problem is the way the government buys and plans
investment in the mid to long term. The purchase is focused
on solving immediate problems, so we are missing better
evaluations and long-term planning to invest in solutions
that impact problems and processes. IMSS has changed its
purchasing process greatly and we hope this filters through
to other federal institutions.
Q: What other priorities does Dräger have within Mexican
healthcare?
A: We want to change our business model and go directly
to market, without intermediaries. We have been working
on this for a long time and many doors have opened as a
result of the government’s new purchasing systems.
Q: What benefits have you had from the new purchasing
schemes?
A: We saw a great result with the IMSS’ scheme and we were
successful in the consolidated purchasing of ventilators and
monitoring equipment. This is a good initiative from the
government, but it should focus on purchasing solutions
that could be integrated and become part of a system in
the future to provide a better service instead of purchasing
individual pieces of equipment. The prices are also low so
they are not sustainable in the long term. We can offer those
prices for one year but not several years running, especially
with the depreciation of the Mexican peso against other
currencies. This is not sustainable and endangers quality.
The first step should be to understand the value of complete
solutions and then change the model to purchasing based
on specific therapeutic needs. If the government purchases
equipment from different brands for a surgical room, they
will have different maintenance teams, different guarantees
and different providers.
Q: How are Dräger’s commercial interests split?
A: Our business operations are split 50/50 between
government and the private sector. We want to increase
our business with the private sector and achieve a
split more like 40 percent government and 60 percent
private. Due to its business model, the private sector is
more dynamic in its purchasing and we can process our
sales directly with clinics. The sector is on its way to
establishing integrated solutions that we can support
with our portfolio. We are seeing some success with
Dalinde and Hospitales Star Médica. We created an
alliance with Christus Muguerza for building surgical
rooms with B.Braun and Diphsa that could bring many
benefits for private institutions.
Q: In what areas does Dräger focus its innovation activity
and what new products are in the pipeline?
A: We are focused on intensive care, ventilation, anesthesia
and neonatal care. In the specific case of neonatal care,
this year we are launching a new incubator called BabyLeo,
a crib with thermoregulation. It provides many benefits
when working with newborns, such as efficiency, a quiet
environment for the baby at 40 dB(A) and ease of care-
giving for clinicians and parents. It is also possible to
perform surgical procedures inside the incubator while
maintaining humidity, temperature and oxygen control.
BENEFITS OF DIGITAL ERA ALREADY ON DISPLAYMARTÍN FERRARIDirector General of Dräger Mexico
VIEW FROM THE TOP
Dräger is a German company established in 1889 that operates
across sectors including mining, oil and gas and health, where
it specializes in medical devices for hospitals in the surgical,
intensive and neonatal care and monitoring sectors
121
Siemens as a whole. In addition, there are many synergies
and similarities between the other parts of the business,
although not for healthcare. We can now take strategic
decisions faster. If we want to make an M&A decision, take
a new strategy or create new products we no longer need
to refer back to Siemens. The brand name is to give us a
specific identity. Not everyone understands the meaning
at first but Healthineers expresses our engineering and
pioneering background applied to the healthcare industry.
Q: In 2016 you reached agreements with hospitals in
Turkey. To what extent is Siemens interested in agreements
with hospitals in Mexico?
A: We absolutely are. At the same time as continuing
investment in new products and R&D, we want to expand
our business into new services related to our products.
That is the final goal: to be the enabler or facilitator of
healthcare providers, enabling them to perform better with
higher output and lower costs. We are not looking for any
specific types of hospitals but it would have to be at least
a midsized hospital as this is not the type of project that
could be implemented with a small hospital.
Q: In February 2017 Siemens announced a US$200 million
investment for the next 10 years in Mexico. How much of
this is going to healthcare?
A: A small part of it will go to health. There are factories
and development centers related to the other businesses
but it would be difficult to have local production for health.
The typical example is magnetic resonance, as the annual
Mexican market is probably for around 20-25 systems. This
is not mass production, these are high technology products
and manufacturing is concentrated in one or two places
across the world. This is why healthcare will only receive
a small part of the US$200 million because most of it will
go to plants.
Q: There is a trend toward deregulation of medical devices
in Mexico. How does this impact your operations?
A: This trend is good for us as long as it is done intelligently
and efficiently. Regulation is a difficult topic because our
industry is highly regulated in all parts of the world and
it has to be protecting the population. However, it must
also be efficient and not be an obstacle for the population
to have access to the latest technology. A balance must
be struck between protection and access and I believe
COFEPRIS is working on this in an intelligent way. What
is important is that COFEPRIS has maintained an open
dialogue with the industry and we need to talk with them
through our associations such as AMID and CANIFARMA.
Serious companies want a regulated industry but regulation
that is efficient enough to avoid being an obstacle.
Q: What growth has Siemens Healthineers seen in 2016?
What were the main drivers of this?
A: In 2016, Siemens Healthineers Mexico had a good year
considering the context. We had double-digit growth, so we
can say that it was a good period in terms of revenue, as we
had many orders pending from 2014/2015. In terms of new
orders, we continued to grow but this slowed down and we
ended 2016 with high-single digit growth. We gained market
share and we grew above the market, but it was difficult
because of the peso devaluation against the US dollar and
public budgets being cut due to a drop in oil prices. However,
it was stable thanks to the private market as it continued to
invest despite the fact that the public market contracted.
Q: How has rebranding as Siemens Healthineers boosted
Siemens’ image and operations? What benefits is it
bringing to your operations and clients?
A: The new brand is just the final stage of a bigger process
that began with the separation of the healthcare business
into an independently managed business. The second step
was the implementation of the new strategy. Then, a new
structure, new business principles and corporate values and
the introduction of the new brand came. The main benefit
is that we have gained speed to react to client and market
needs. Siemens is huge and diversified. Total revenue
for health is €15 billion compared to over €80 billion for
CHANGE IN FOCUS FOR MEDICAL DEVICES GIANT
ALEJANDRO PAOLINIGeneral Manager of Siemens Healthineers Mesoamerica
VIEW FROM THE TOP
Siemens Healthineers is the healthcare branch of the German
electronics giant. It is mostly known for its medical devices,
which cover a wide range of therapeutic areas, with a focus
on diagnostics, imaging and IT
122
Q: What is your view on selling through public tenders
in Mexico?
A: Due to the market niche we work in, we are obligated
to deal with huge distributors that offer integral services,
which is complicated. They consolidate several brands and
sell a complete service to the hospitals of IMSS and ISSSTE,
although PEMEX, SEDENA and SEMAR have remained
outside this model. Both IMSS and ISSSTE classify Arthrex’s
technology as minimally invasive (MI) and 90 percent of these
MI procedures are abdominal, while 10 percent is for joints.
This turns into a fight every year as the volume reduces. Being
only 10 percent of the contract, distributors do not place the
same emphasis on arthroscopy. The ideal scenario for us
would be for integral services to end or include arthroscopy in
orthopedic tenders. Ideally, we would provide services directly
to government institutions but they never have the budget
to buy everything.
Q: What is Arthrex’s strategy to expand its reach in the
private market and to stand out against its competitors?
A: We have learned we need to analyze more factors before
making the decision to launch a new product, to focus on
more profound marketing studies using a sniper technique.
Globally, Arthrex has 12,000 products, of which 2,600 are
available in Mexico, which is the right number of SKUs
based on the Mexican market’s need. This has enabled us
to see growth rates of 17-18 percent in the country. Another
key point is service: when we sell an anchor, we are also
selling the accompanying equipment and a technician to
help. For MX$25,000 (US$1,389) worth of sales, we have to
move MX$600,000 (US$33,000) of equipment, products
and personnel. We have to define our service standards
and stick to them. We go with a full set of equipment, the
instruments are in perfect condition, the technician will be
well-trained and we will be there for anything needed. This
reinforces our credibility with doctors.
Q: Which products are you bringing to Mexico?
A: We do not want to deprive Mexico of innovation, so
we work on a diversified portfolio for A and B markets as
physicians move between distinct hospitals and different
reimbursement scenarios. In Mexico, the most common
surgeries would be shoulder instability, rotator cuff tears,
anterior cruciate ligaments rupture, meniscus reparation,
syndesmosis, Achilles tendon repair and internal braces for
ankle stability. These seven surgeries all have an A and B
portfolio available in Mexico.
Q: Arthrex has an educational center in Florida. To what
extent does the education you offer in Mexico help
doctors improve their skills?
A: In addition to the Florida Center we have one in Mexico
and one in Brazil because we have the obligation to correctly
train doctors to use our products. The courses are open to
everyone, even those who do not use our products. Some
courses are available online through Arthrex’s webpage,
which puts over 4,000 videos online, and through our
Surgeon’s Virtual App, which enables doctors to first
practice digitally before moving onto dry labs. In our labs we
use imported cadaveric pieces from the US. Unfortunately, in
Mexico the culture of organ donation is poor and if we have
chance to use a Mexican cadaver, the law is clear, demanding
use of the full body. Can you imagine putting a full body on
a table just to practice on the knee?
Q: What is the most important product you will be
launching in Mexico in 2017?
A: Apollo, a bipolar radiofrequency for arthroscopy. It will
be brought to Mexico in July 2017. Arthrex has the fastest
processing times of all medical device companies in Mexico
and our products are approved within an average of 60
days. In our 2015-2016 financial year, we registered 102
products. The priorities for this year will be to maintain
operational excellence and for our sales team to begin
identifying new opportunities and to relaunch technologies
that did not have the initial impact we had hoped for. The
second priority will be human capital management. The
third point will be to continue our great work in compliance,
not as an obligation but as a way of business.
ARTICULATE GROWTH FOR MEXICONELSON VALENZUELALATAM and Caribbean Director of Arthrex
VIEW FROM THE TOP
Arthrex is a medical devices company and a leader in new
product development and medical education in orthopedics.
The US-based company is a pioneer in orthobiologics,
arthroplasty and in the surgical treatment of arthritis
123
SYNERGYRF SYSTEM WITH APOLLORF_ PROBES AND SYNERGYUHD4 SYSTEM
SPOTLIGHT
The First Biopolar RF System to integrate with an Arthroscopic
Imaging System.
The SynergyRF System with ApolloRF Probes completes the
Arthrex® Synergy arthroscopy platform with an easy-to-read
“heads-up display” of operational settings on the Synergy 4K
monitor.
The Apollo MP90 Probe with multiple suction ports is designed
for efficient ablation and coagulation, and has an ideal working
length for shoulder, knee and hip arthroscopy.
MP90 Probe
XL90 Probe
Hook Probe
Aviso de publicidad No.17330020202C3318
TM TM
TM
124
INSIGHT
FLEXING MUSCLE IN MIDTIER KNEE REPLACEMENTGERMÁN GARCÍADirector General of Smith & Nephew
to reduce the price,” García says. The company, which
specializes in advanced wound management, sports
medicine, orthopedic reconstruction and trauma, works
with both the public and private sector. In Mexico, around
90 percent of its medical devices go to the public sector,
its largest single purchaser in the country.
“Innovation can drive costs down for the system. Sometimes
an innovative product is less expensive, more efficient and
carries many benefits for patients,” García adds.
Speaking to general market trends in medical devices,
García says that “the trend is to make smaller products
and less invasive procedures for the faster recovery of
the patient.” The materials used are also relevant. Smith
& Nephew has developed highly resistant plastics that are
lighter and less expensive than metal and can be used safely
for instruments and specific parts of prosthetics. A knee
prosthetic with these plastics can last for over 20 years.
The company also develops tools to perform arthroscopy,
such as TWINFIX, used for repairing joints. “This device is
friendly for physicians and the fixation products we use are
high quality,” says García.
Despite the government being a large client, doing business
with it is not so easy. “We have to develop a tender for our
new products, it does not come automatically,” García says.
“We must first present the product then talk to doctors
and institutions so they can develop the tender and then
we can participate.”
Registering a new device can also be time-consuming,
taking as much as two years. García calls for simplification
of the registration process because the medical devices
industry evolves rapidly. He also hopes for improved
access to medical devices in Mexico. “Half the population
has Seguro Popular, which is limited because it covers
only catastrophic diseases. They do not have access to
advanced medical products,” he says. But he is optimistic
about growth in the country. “The medical devices market
in Mexico is underdeveloped, which means there are many
opportunities to grow.”
Midtier knee replacements designed with affordability and
quality in mind offer a solution for shrinking health budgets
in emerging countries like Mexico. Prosthesis and medical
devices manufacturer Smith & Nephew believes the key
clues to reducing costs can be found in the specifics of
the population.
Knee replacement, a form of arthroscopy, is a common
procedure performed daily worldwide. It is most often
done on patients over 50 years-old, with over 90 percent
experiencing dramatic pain relief after the surgery, according
to the American Academy of Orthopaedic Surgeons.
ANTHEM, Smith & Nephew’s artificial knee, was developed
in emerging countries worldwide, where the population
is typically shorter than Americans and Europeans. The
company has also simplified the replacement process, as
it requires only three trays of surgical tools rather than the
seven previously required, which also reduces the overall cost.
“This product is the combination of two innovations: it is
specifically designed for Latin American and Asian markets
due to the size of the population and we have simplified
the number of pieces required for the procedures,” says
Germán García, Smith & Nephew’s Director General
for Mexico. “During the research phase, we began by
identifying bone characteristics of patients and then we
identified the best fit for those bones, combining the skills
of researchers, physicians and marketing personnel to also
reduce the number of pieces.”
Smith & Nephew works in both medical devices and
arthroscopy, the latter of which represents around a third
of its yearly sales and between 30 to 45 percent of the
Mexican market, thanks to a focus on cost efficiency and
innovation. The global arthroscopy market was valued at
US$4.0 billion in 2015, according to Grand View Research.
“We know that in developing countries in Latin America,
Africa and Asia the public sector budget is constrained,
so we try to develop products that are affordable for that
sector while maintaining quality. We implement innovation
Q: Medtronic has said the government needs to place more
importance on the healthcare sector. What progress has
been made?
A: Over the last two years, we have reached out to the
authorities, private companies, regulators, patients and
insurance companies to create an alliance to communicate
a common message: there is a need for a health reform
in Mexico that should focus on two areas. The first is to
separate financing from service provisioning and establish
a payment system that provides finance for any medical
service. The second change should be to open access to
the healthcare system, meaning that they should be able
to choose where to be treated.
Q: What strategy could lead the system to a better use of
healthcare resources?
A: We are one of the leading companies open to the creation
of a new health financing system in which the risks are
shared between providers and clients. As providers, we are
looking to work with the client to share risk by establishing
strategies such as performance-based payments. Under
such schemes, the customer will only pay if the product
achieves the desired performance or results.
Q: What has been the government’s response to these
alternative strategies?
A: It has been very good, but it is a challenge to make
it a reality because private companies are changing from
being providers to becoming partners. We are finding
many barriers. The regulatory bodies are very price-based
and they are close-minded to ideas like payment for
performance. Inertia has ruled the system for a long time
and it is very hard to change that. Lack of transparency is
also a major problem that prevents us from moving forward.
Q: What is Medtronic’s value proposition to ensure the
productivity and effectiveness that health institutions
require?
A: In terms of portfolio, Medtronic is the largest medical
devices company in the world. We provide integral
solutions for Mexico’s main health concerns. We are
the unique provider in Mexico of insulin bombs for T1D
patients. There are approximately 200,000 people with this
condition and only 1,300 insulin pumps users. Medtronic
is also open to sharing its global experience to quantify
and identify uncover needs inside the institutions. We are
working to develop information that will provide real data
on the costs of diseases because providers cannot offer
solutions without having total knowledge about the cost
of a problem. Finally, we can offer expertise in production
and manufacturing processes to institutions like IMSS or
ISSSTE thanks to our five manufacturing plants and the
13,000 employees we have in Mexico.
Q: Does the system have access to the technology it needs
to improve?
A: Patients in Mexico do have access to great technology.
There are patients who can get an artificial pancreas
at a clinic with integral services, but the majority of
the population has no access or very limited access to
basic health services. The responsibility for companies
like Medtronic is also to make technology available for
everyone. Lagging behind on technology implies a higher
cost for the system and for patients. As an example, we
have remote monitoring of heart rates that could allow 80
percent of patients to stay at home instead of going to a
hospital. However, the level of knowledge of doctors and
patients to use the equipment and the service model are
not connected.
Q: What actions is Medtronic taking to open access to
healthcare?
A: For us, access has four definitions: education and
training of human resources, doctors and nurses; available
and useful infrastructure; promote financing and establish
efficient service models. In education, we are working
on projects to better introduce technology to doctors,
especially in cardiovascular health, diabetes and obesity.
125
OPENING THE ROAD TO A NEW HEALTHCARE SYSTEM
FERNANDO OLIVEROSVice President of Medtronic
VIEW FROM THE TOP
Medtronic is a global technology company. It is a leader in
the development of medical devices focused on solutions for
diabetes, cardiovascular health and obesity. It has been in Mexico
for more than 40 years and it is present in more than 140 countries
126
THE MEDICAL DEVICES SEGMENT IN MEXICO
It took only 12 years for Mexico to become a major cluster in
medical devices manufacturering, achieving solid participation
in the global industry and a solid growth perspective.
A growing list of international companies have
invested US$1.94 billion (from 2005 to 2015) to
take advantage of the country’s human capital,
low operating costs and strategic location.
Medical devices come in all shapes, sizes and levels of
sophistication. The growth of the sector shows no sign of
slowing down.
INFOGRAPHIC
Medical-device manufacturers have reason to be positive. A
higher life expectancy, patients with critical illness, an aging
population and increasing home-based assistance will boost
new products and services
Germany
Italy
US
TOP INVESTORS
� 86% US
� 6% Italy
� 5% Germany
TOP INVESTORS
$8.41 Exports
$3.96Imports
156,831Jobs
$1.94FDI (2005-2015)
AT A GLANCE (US$ billions)
COMPETITIVE ADVANTAGESDRIVEN BY TIJUANA
EXPORTATION OF MEDICAL DEVICES BY STATE (US$ billions)
Over 30Production plants
Over 75Medical specialties
Over 7,100Sanitary registrations
Over1,400Products released (2013-2018)
Only 30km away from San Diego, Tijuana’s medical devices hub
impacts both Baja California's GDP and the US market (the biggest with
a global 38% market share).
• Top exporter in LATAM• Eighth exporter worldwide• Low production costs• Qualified talent • Export platform• Special federal programs • Next to the world’s top producer
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70%of firms based
in Tijuana/Tecate are from
the US
Mexico’s relevance for the US
industry: Over
$US7.7billion per year in sales from Mexico
Sources: ProMéxico, El Economista
� Number of companies
127
0 10 20 30 40 50
MalaysiaHong Kong
AustraliaAustria
Costa RicaDenmark
South KoreaItaly
SingaporeUK
JapanFranceMexico
SwitzerlandIreland
BelgiumChina
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01020304050
AustriaIndiaBrazil Russia South KoreaSingaporeMexicoSpainSwitzerlandAustraliaCanadaItalyUKFranceJapanBelgiumChinaNetherlandsGermanyUS
MEXICAN MEDICAL DEVICE MARKET (US$ billions)
TOP 20 COUNTRIES FOR MEDICAL DEVICE IMPORTS AND EXPORTS (US$ billions)
EXPORTS: MEXICO'S GLOBAL RANKING
MEXICAN MARKET OF MEDICAL DEVICES
0
1
2
3
4
5
6
7
8
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Import
Export
201520142013201220112010200920082007
4.5
62.
18
2.37 2.61 2.64 3.01 3.04 3.153.41
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� Exports � Imports —Trade balance
� Export � Import
4th Instruments and devices for medicine, surgery, dental and veterinary / furniture for medicine, surgery, dental and veterinary / syringes, catheters, cannula and similar products
3rd Tubular suture needles
*Sales FY2014. Figures in US$ billions
other
Japan
Swiss
Germany
China
US other
South/Central America
EU
Asia Pacific
North America
MEDICAL DEVICE PRODUCTION BY
REGION
MEDICAL DEVICE PRODUCTION BY
COUNTRY
� 41.0% North America
� 30.9% Asia Pacific
� 19.2% Europe
� 1% South/Central America
� 7.9% Other
� 38.2% US
� 22.1% China
� 6.5% Germany
� 4.2% Switzerland
� 4% Japan
� 25% Other
AMID’S AGENDA
AMID is the sector’s top association of companies; it has 30 Mexican and global firms as members.• For the health sector: simplify access to
innovative technologies.• For tax authorities: encourage investment
and improve transparency in acquisitions.• For economic promotion: build public
policies to boost competitiveness and exports.
MAIN COMPANIES WORLDWIDE*
Johnson & Johnson 27.50
GE Healthcare 18.29
Medtronic 17.00
Baxter International 16.67
Siemens Healthcare 15.77
Philips Healthcare 11.17
Cardinal Health 11.00
Covidien 10.66
Abbott Labs 10.11
Stryker 9.66
US$663 billion in 2015
US$894billion expected for 2020
PROJECTED GLOBAL GROWTH
128
Q: What were B. Braun’s growth numbers in 2016 and what
challenges did it overcome?
A: We grew 25 percent in 2016 between the two divisions,
while Aesculap alone grew by over 30 percent. This
growth was achieved despite the government’s budget
cuts and new purchasing habits. We participate in few
categories in the public tenders as the National Formulary
is increasingly targeting generalized products, which hurts
us. Sometimes, products with current technology and
quality compete against products with old technology
that are cheaper to produce, which limits our chance of
successful participation in certain areas. Of the 600 or so
categories in medical devices, we participate in only seven.
It is not that all our products are state-of-the-art, but a
10-15 year-old product is also at a disadvantage because
the required specifications for the product may be 30-40
years old. I do not believe this will change anytime soon
because the public sector is working on a reduced budget.
Q: What impact do you expect hemodiafiltration will
have in Mexico? How does it differ in performance from
hemodialysis?
A: Hemodiafiltration – a technology that combines
hemodialysis and hemofiltration – was launched here at
the end of 2016. Compared with hemodialysis, the machine
purifies the blood of urinary toxins and also filters out
B. Braun is 178-year-old German medical devices giant. It
operates in four main areas: hospital care, out-patient, aesculap
and atvium, which are concentrated in two divisions in Mexico.
Medical encompasses the first two, Aesculap the latter two
COMMITTED TO THE FUTURE OF HEALTHCARLOS JIMÉNEZDirector General of B. Braun Aesculap
VIEW FROM THE TOP
There are between 80,000 and
100,000 people in Mexico that
are undergoing peritoneal dialysis
smaller particles. The speed of flow can be modified to
better respond to patient needs. This is an easier therapy
for patients than hemodialysis and the results are better.
This technique could help around 65,000 people in Mexico
that are being treated with hemodialysis. However, there
are between 80,000 and 100,000 more people that are
undergoing peritoneal dialysis.
Although the associated costs are higher because more
advanced equipment is required, at the moment neither
insurers nor the public sector recognize a distinction
between hemodialysis and hemodiafiltration, so hospitals
are bearing the extra costs themselves and to provide
better care to patients. It is covered separately for patients
in private care because the supplies are billed separately.
Six clinics are now using hemodiafiltration equipment. We
do not sell the equipment but loan it as the machine is
much more expensive than hemodialysis technology.
Q: What are the main surgical trends permeating Mexico’s
operating rooms?
A: There is a strong focus on integral services and on cost-
reduction in public centers. Previously, criteria stated that
to offer integral services, one had to provide equipment of a
certain technological level and age but these specifications
have been removed to reduce costs. Now, devices can be
reused but the regulation does not specify how to reprocess
certain pieces, such as disposable devices. We are still
waiting on standards: how to wash them, for how long, with
which substance and which chemicals and how to perform
functionality controls. This has led to uncertainty regarding
cost. For example, if a service costs MX$100 million (US$5.5
million) one year and MX$80 million (US$4.4 million) the
next, ostensibly that means MX$20 million (US$1.1 million) in
savings. But if products are reprocessed, the internal costs
generated to do so should be taken into account. We do
not know what the true savings are.
As for the private sector, insurers are putting pressure
on hospitals to not pay high increases in the cost of
medical care. Hospitals are allowing for increases of 3-4
percent due to inflation but most products are imported
129
in US dollars or in euros. The increase in prices hospitals
negotiated with insurers was a maximum 8 percent, so
we are reaching a point where they cannot absorb these
costs. Possible solutions might be found by having more
efficient processes and through innovations, products and
patient treatments.
Q: Innovation has always been at the forefront of B.
Braun’s operations. What is next for the company?
A: We have many product lines to launch, including a
prosthetic that helps maintain bone structure. It will be
available in 2017 and will enter the National Formulary so
that public patients can have access. We will also launch
products intended for intensive care. Our technology of
continual therapy is connected to a patient for a few days
to slowly clean the blood and requires little effort from the
patient. This was a key theme in the World Nephrology
Conference, held in Mexico City in April 2017. We are also
building an auditorium for the Aesculp Academy and
B. Braun will participate in over 40 congresses in 2017,
demonstrating our commitment to the industry.
Q: How do solutions such as B. Braun Knowledge Center
and the Academy help you manage a more successful
business?
A: The Aesculap Academy is a foundation that was created
20 years ago and is independent of B. Braun. The concept
is to bring health professionals, specialized education and
knowledge to execute patient treatment in a safer manner
and to achieve better patient outcomes. B. Braun supports
the Academy through donations. The Academy has a grant
system and offers paying courses, which helps it maintain
its autonomy. B. Braun started the Academy but now it has
other partners such as the Mexican Academy of Surgery,
which has developed programs with the Aesculap Academy.
The Knowledge Center responds to a need to better train
our staff members in understanding processes, knowing
products and learning about authorization processes. This
is the basic platform for teaching B. Braun employees how
to work well in the company.
Q: To what extent are you impacted by COFEPRIS
deregulation of medical devices?
A: It is vital that deregulation happens, because it
makes no sense that a medical spatula used to hold
down a tongue has such high registration requisites.
Technically, it is not dangerous in use nor complicated to
manufacture. Deregulation is needed for these types of
products. However, B. Braun would see no benefit from
such deregulation because our product portfolio is much
more precise and more impactful on patients. We do not
manufacture a single product on COFEPRIS’ huge list of
deregulated products.
130
INSIGHT
MEXICAN HEALTHCARE INCHES INTO THE DIGITAL FUTUREULISES BACILIOCEO of Grupo PTM
are afraid they will not be able to see the image in as much
detail. “They are a dogmatic profession; they are not used
to changing their ways. This is true worldwide, not only in
Mexico.” The X-card is in use in four hospitals in Mexico:
two in Toluca, one in Puebla and one in Cuautla. “Millions
of radiographic sheets are still used every year in Mexico.
ISSSTE alone spends MX$30 million (US$1.7 million) per
year on these sheets,” Bacilio says, adding that eliminating
the radiographic sheet has been the company’s motto and
mission from the beginning.
The company has also digitalized its internal processes,
shortening its operating cycle by asking for immediate
payment and resolving cash flow issues. This has allowed
PTM to further invest in its technology and to provide
its customers and ultimately patients with newer, better
products and services. PwC predicts the global value of
connected health to reach US$61 billion by 2020.
Another product on offer is the Invox, a voice recorder
designed especially for medical professionals that speak
Mexican Spanish. It uses linguistic analysis to automatically
register keywords and categorize the recording, allowing
users to easily search through voice albums at a later date
and retrieve data. “We provide updates to the software
almost every month, constantly improving the product,”
says Bacilio, who believes that digitalization will also
allow companies and public-sector institutions to begin
collecting data on the services they offer and that they
will be able to analyze it and put it to good use, to better
serve patient needs.
Grupo PTM works with over 400 clients in every Mexican
state, ranging from small clinics to large hospitals. As of
December 2016, over 100,000 mammograms and 7,000
cancers had been diagnosed through PTM’s technology. The
volume of clients it works with has allowed the company to
begin compiling statistics. “The data we collect could be
useful for clinical research. For example, there are many
gastrointestinal cancers, in particular in Hidalgo,” says
Bacilio. “We also realized that Tuesday is the busiest day
of the week for medical appointments in Mexico.”
Digitalization is making its way across every sector of
the health industry. In addition to being environmentally
friendly, these solutions save costs and are practical, says
Ulises Bacilio, CEO of Grupo PTM adding the biggest
obstacle is not patients. “Doctors are the greatest resistance
we face,” he says.
Working in conjunction with global medical imaging giant
Phillips, Grupo PTM, a leader in technology solutions for
hospitals, provides interpretations of radiographs that are
delivered digitally in a matter of days. That compares with
the months it previously took to get an interpretation to
a patient, especially those in remote areas. The company
also provides cloud storage for the interpreted radiographs.
The X-card, its key product, allows patients to have their
medical history and images on hand at any point in time,
no matter where they are in the world.
The patented invention consists of a credit card-sized
plastic card that bears a unique code. The patient can scan
this code or enter it into the Grupo PTM website to instantly
access their medical images and share them with their
specialist of choice. In addition to being environmentally
friendly, these solutions save costs and are practical. “A
patient can load all his studies onto the card and it can
be read with a simple QR scanner on a cellphone,” says
Ulises Bacilio, CEO of Grupo PTM. If a patient loses the card,
he only needs to inform the company, which cancels the
code and reissues a new card and code. Despite the many
benefits, implementing digital solutions is not always easy.
“Patients rapidly accept innovations such as the X-card.
They find it amazing,” says Bacilio, explaining that doctors
PTM technology has diagnosed over 100,000
mammograms and 7,000
cancers
131
that market will be in healthcare. This makes sense to me
because although there are applications for the automotive
and aerospace sectors, they usually work B2B. None of
them are B2C. Health is probably the only market that
requires printing to be B2C, which is why it will grow a
lot. Also, we have made many improvements. We can print
hydroxyapatite, the material that makes up between 50
and 60 percent of human bones. If we print this material
and implant it into a person using stem cells, the body will
react to its foreign shape as if it were made of bone cells
and real bone will form around it. This is something that
could be possible in the next few years. The problem is
that certification for something of this kind is extremely
complicated. It requires a cleanroom that costs millions
of pesos. It is complicated for startups to fund elements
such as cleanrooms and big companies do not do it yet
because they are not sure about entering this B2C 3D
printing market. It is complicated but I think it will happen.
Q: How is the 3D printing industry regulated in Mexico?
A: There is no effective regulation for 3D printing around
the world. The FDA has just started thinking about
regulating it differently from other devices but technology
will always advance faster than regulation. 3D printing
can make almost anything but you need to regulate every
product that comes out of the printer. If the product is
sufficiently different from another, there must be another
piece of regulation. That is why people are only producing
one product and why regulating institutions such as the
FDA are thinking of implementing a special scheme. It is
complicated though. How will you know that someone
printing casts but who also wants to do brackets will do
them correctly? That is why I think regulation is there for a
reason, to protect people. So far in Mexico we do not have
a specific regulation or norm for 3D printing and we have
to comply with the general norms regulating casts.
Q: What are the benefits of creating new products in
Mexico and how open is the country to innovation?
A: Mexico is an interesting market. It is a country with a
large population with different problems, so there are
plenty of fields in which we can innovate. The creation of
innovative products should be aligned with national needs.
But it is important to understand that the distribution chain
for the healthcare sector is different in Mexico than in other
countries. The government, the private sector, integrators
and distributors interact based on different interests. Also,
there is a strong regulatory environment here and if you are
a startup, raising resources for a product you are not yet
selling can be complicated because it needs to be certified.
One of the advantages in starting with innovative products
is the possibility of being recognized in other ways, such
as through published papers or giving keynote speeches
in hospitals and medical congresses. Entrepreneurs can be
recognized through competitions. We have won some in
Mexico and Europe and that was our main source of funding
in the beginning. We also received some government aid
and now we are closing our first round of investment. Most
of our money goes to R&D and the government helped
us through programs offered by the National Institute of
Entrepreneurship (INADEM).
Q: How much is 3D printing used in healthcare and what
are the technology’s main advantages?
A: In Mexico not very much. Aside from MediPrint, I have
only seen some instances in which disabled people are
given or sold prosthetics that have no regulatory approval.
That is illegal but there is a need that has to be satisfied,
which wasn’t happening at an adequate market price point.
Besides that, 3D printing is not something broadly used yet.
This technology is available and used around the world but
not as much as it should be. 3D printing has been around for
30 years but many patents held by big companies expired
just a few years ago.
Q: What are the potential healthcare uses of this
technology?
A: McKinsey says the 3D printing market will reach around
€500 billion by 2020. Deloitte has said that 60 percent of
CASTING A 3-D APPROACH ZAID BADWAN
Director General of MediPrint
VIEW FROM THE TOP
Mediprint is a Mexican start-up dedicated to the research,
development and creation of personalized medical solutions
using 3-D scanning, modelling and printing technology. Their
product ambitiously aims to replace the traditional plaster cast
133
Technology is developed with the objective of making lives easier and better
lived. This has specific potential in healthcare, in which technology has become
an opportunity to save lives and optimize patient comfort. The need to become
more efficient in patient care and to manage the large amount of data generated
has made the adoption of technology necessary to automate processes and highly
standardized and repetitive tasks. Recording patient data has become a priority in
itself to guarantee the existence of a broad database to offer the best treatment
and follow-up for patients, but this also represents a security challenge. The digital
world has been rocked by several high-profile international breaches and healthcare
institutions and companies must ensure the confidentiality and protection of the
data they collect to earn patient trust. The effectiveness of Big Data is a result of its
veracity, velocity, variety and volume. This information will help guide doctors and
policymakers on the efficiency of medicine and research, among other trends.
This chapter will give an overview of the companies that deal in Big Data and digital
applications for smartphones that have a health focus. In addition, those designing
wearable health technology will shed light on the impact they have had on the
Mexican market and mindset.
BIG DATA & HEALTH APPS
6
135
CHAPTER 6: BIG DATA & HEALTH APPS
136 ANALYSIS: Digitalization Advances But Pace Remains Uneven
138 VIEW FROM THE TOP: Xavier Valdez, QuintilesIMS
139 INSIGHT: Antonio Carrasco, Grupo PLM
140 VIEW FROM THE TOP: Guillermo Ferrari, Eseotres
142 VIEW FROM THE TOP: Guillaume Corpart, GHI
143 VIEW FROM THE TOP: Enrique Martínez, IIIFAC
José Ferreyra, IIIFAC
144 VIEW FROM THE TOP: Alejandro de la Parra, Astrum Salud
146 VIEW FROM THE TOP: Santiago Ocejo, Salud Cercana
148 VIEW FROM THE TOP: Mario Amadio, GE Healthcare
149 INSIGHT: Maciek Drejak, Northcube
150 VIEW FROM THE TOP: Benjamín Villaseñor, Uhma Salud
Roberto González, Uhma Salud
151 VIEW FROM THE TOP: Melanie Chase, Fitbit
152 INSIGHT: Javier Cardona, 1DOC3
153 VIEW FROM THE TOP: Federico Casas-Alatriste, T-Systems
154 INSIGHT: Julián Ríos, Higia Technologies
155 VIEW FROM THE TOP: Xavier Ordoñez , Deloitte
Horacio Peña, Deloitte
136
DIGITALIZATION ADVANCES BUT PACE REMAINS UNEVEN
Well-designed and effectively used information
infrastructure has the potential to become the lynchpin
of quality for successful healthcare systems globally,
according to the OECD. However, the industry lags
other sectors in adopting the tools that could elevate its
management and delivery of care. In Mexico, where budget
cuts to the public health system have hampered spending,
it is critical that Big Data and high-tech solutions begin
playing a greater role in the sector.
The OECD report, Mexico’s Health System Review 2016,
highlights some of the core uses of well-managed health
data: evaluation, monitoring, personalization of care,
ensuring of continuity, support provision, purchase and
prediction of care needs. Consulting firm Deloitte says
connected health or technology-enabled care (TEC),
which refers to the merging of health technology, digital
media and mobile devices, is capable of providing cost-
effective alternatives at a time of increasing demand in
health and social care.
Unfortunately, the health industry is behind other
sectors in terms of digitalization, not just in Mexico but
internationally. Research from the McKinsey Global Institute
(MGI) looked at digitalization in different economic sectors
in the US. The results showed the workforce of companies
in leading sectors are 13 times more digital than the rest
of the economy. An article written by McKinsey partners
and published in the Harvard Business Review in 2016
pointed to the disparity between the sophisticated use
of high-tech in specialized health areas and the lack of
digital fluency in others: “Many healthcare organizations
use incredibly sophisticated technology in diagnostics and
treatment but substantial parts of their workforce use only
rudimentary or no technology. Fewer than 20 percent of
payments to healthcare providers and their suppliers are
done digitally, for example.”
In the case of Mexico, it has been almost 15 years since
the implementation of NOM - 024, which requested the
application of electronic medical record systems in health
services providers. A decade and a half later, the pace of
digitalization at healthcare institutions remains uneven. The
OECD discovered that data is generated only at various
points in the Mexican system, creating a fragmented
approach. According to Guillermo Ferrari,
General Manager of Eseotres, which provides
digital-imaging solutions, IMSS carries out
between 19 and 20 million image studies
every year, using 1.5 million square meters of
Eseotres’ analog film. “The vast majority of imaging studies
done by public health institutions is archived in boxes.
Through digitalization, the studies’ archives can be easily
retrieved and shared and become a source of Big Data
to develop useful information for the creation of health
policies, efficient resource allocation and productivity
measurement,” says Ferrari.
EMPOWER PEOPLE
Gathering the data is only the first step and making it
available and shared is among the top challenges Mexico’s
public healthcare institutions have faced. Technology
companies recognize this and are creating solutions.
Five years ago, IMSS would have more than two medical
records for patients who had visited different institutions.
This increased the out-of-pocket expenditure whenever a
patient had to re-take a test or analysis. Businesses like
GE Healthcare have worked to develop common systems
of shared information. For example, GE Health Cloud is a
product designed by GE Healthcare to integrate clinical
workflows while managing the volume, velocity and variety
of healthcare data. According to Mario Amadio, President
and CEO of GE Healthcare Mexico, “the cloud will be
capable of connecting to more than 500,000 GE medical
imaging machines and more than 1.5 million imaging
machines worldwide, linking to millions of other healthcare
devices, including patient monitoring, diagnostics,
anesthesia delivery, ultrasound, mammography and various
data sources. The future is not about having an application
in a machine, it is about getting the information produced
by the machine in a cloud and working with it.”
The public sector is also making progress. In October 2016,
Mikel Arriola, Director General of IMSS, and Ángel Gurria,
the Secretary General of the OECD, signed a cooperation
agreement to apply a digitalization and simplification
program for the institution´s procedures. Early in 2017,
Mikel Arriola announced during a press conference that
IMSS has saved MX$5.5 billion (US$305 million) through
the digitalization of 78 percent of its procedures. Processes
that before took 40 days, now take three.
Patients themselves have a role to play by adopting the
solutions digitalization offers, such as apps, to take control
of their health. IMSS’ success is in part thanks to the design
ANALYSIS
Digitalization is key to ensuring access to healthcare. Industry
players and public organisms must overcome technological
barriers to make the most of the possibilities offered by Big
Data for better management of institutions and patient health
137
of a mobile and web application available to patients,
but awareness and knowledge are essential – and
unfortunately, lacking. The Health Future Index developed
by the global technology company Philips evaluates
how well companies and governments are overcoming
health challenges through connective technologies.
The study discovered there is a clear need to empower
the population so they can play an active role in the
management of their health. It was conducted through
interviews and surveys with healthcare professionals,
insurers and members of the public to evaluate how
connectivity is oriented toward access to healthcare,
integration of health systems and adoption of oriented-
care technology. The data collected by Philips shows that
24 percent of the population feels no ownership at all
over their medical records and 23 percent of the users
of connected health technology do not know how to
interpret the results delivered by the technology.
STARTUP OPPORTUNITIES
According to Deloitte, mobile technology can empower
patients by giving them more control over their health
and making them less dependent on HCPs for health
information. Deloitte’s data show that the number of health
apps for iOS and Android in the world has doubled in the
last two years to almost 100,000. The opportunities in the
sector have empowered startup companies attracted by the
possibilities of technology in changing health management
for a population of 121 million. “The startup healthcare sector
is very active for innovation in biotechnology, strategies
for healthcare access and home monitoring,” says Vincent
Speranza, Managing Director of Endeavor Mexico.
Given these trends, many entrepreneurs have focused on
the development of apps that promote preventive care
and empower healthy lifestyles through fitness control,
fertility follow-up and sleep tracking. That is the case
of Salud Cercana, a Mexican digital service providing a
platform focused on the management of patients with
chronic diseases to reduce costs. “Ninety percent of the
population has access to public health but 50 percent of
expenditure in Mexico is out-of-pocket. […] Our long-term
goal is to achieve an integrated healthcare sector and
we want to be the platform from which we can manage
patient health and integrate services around them,” says
Santiago Ocejo, Director General of Salud Cercana.
SUPPORT FROM AI
Many entrepreneurs and medical devices companies
also have jumped on the artificial intelligence (AI)
bandwagon, which through the gathering of Big Data can
assist professionals and patients with decision-making.
One example is 1DOC3, an online platform that provides
answers to health-related inquiries for users. According
to Javier Cardona, Co-Founder and Director General
of 1DOC3, through a series of algorithms, inquiries are
processed in fractions of seconds. Typed questions are
compared by the AI with previous inquiries. If a match is
found, the user is directed toward that answer. “Ninety-
nine percent of inquiries match previous answers,” says
Cardona. Another is Higia Technologies, an AI startup,
created a high-tech bra that helps detect cancer through
bio-patches that capture temperature data that is sent
to a mobile app, which keeps a record of the information
received.
Source: Top 10 Healthcare Innovations: Achieving More For Less, Deloitte Center for Health Solutions, 2016
DIGITAL INNOVATIONS TO ACHIEVE MORE FOR LESS IN HEALTHCARE
3D-printed devices To create highly customized, low-cost medical technology products that can be tailored to suit the physiological needs of individual patients.
Artificial intelligence (AI)AI, the ability of computers to think like humans, is anticipated to transform health care by completing tasks currently performed by humans with greater speed and accuracy, and using fewer resources.
Virtual reality (VR)Virtual reality can engage patients in low-risk, artificially generated sensory experiences that could accelerate behavior change in a way that is safer, more convenient, and more accessible to the consumer.
Leveraging social media to improve patient experience
Social media offers health care organizations a potentially rich source of data to efficiently track consumer experiences and population health trends in real time, much more efficiently than current approaches. Organizations have the ability to track consumer experience and population health trends in real time.
Biosensors and trackersBiosensors included in rapidly shrinking wearables and medical devices allow consumers and clinicians to monitor and track more aspects of patients’ health, enabling earlier intervention—and even prevention—in a way that is much less intrusive to patients’ lives.
Telehealth Telehealth offers a more convenient way for consumers to access care while potentially reducing office visits and travel time. This convenient care model has the potential to increase self-care and prevent complications and ER visits.
138
manufactures and the benefit and cost to the customer. We
also analyze the product portfolio strategy to understand
where the laboratory should filter its resources to achieve
a better market result. In addition, we customize research
to understand why doctors prescribe a specific drug.
Q: What new product launches is the company planning
for 2017?
A: We are launching the Prescription Based Service (PBS), a
database of over 45 million prescriptions built by pharmacy
chains, our commercial partners. With this system, our
laboratory clients can see how they are positioned with
doctors, based on the prescriptions those doctors write.
They can also see what a doctor prescribes and what each
doctor uses for certain diseases. We are also interested in
developing a platform to provide doctors with information
and we want to do observational studies to see what
happens with patients after drugs go to market.
IMS Health also bought a company that provides certifications
for clinical and patient services in hospitals. The company
uses a series of indicators to evaluate the different services
a hospital offers and the institution receives feedback
showing where it must improve. We are planning to extend
the operations of this new company to Mexico and offer the
certification. It will help patients rate hospitals, allow insurance
companies to be aware of who they are working with and give
hospitals information on areas for improvement. We are also
working with COFEPRIS to develop a platform where doctors
can receive embargoed news releases.
Q: Digital health trends include digital interventions, data
integration and analytics and behavioral health. What are
the key innovations in Mexico?
A: In Mexico, we are talking a lot about Big Data. However, we
are still in the early stages because to make Big Data work
we need solid information, visualization and capture systems.
In Mexico, some hospitals should have a system to manage
information on chronic diseases that can feed indicators that
track the evolution of these conditions. It is important to
establish the foundation that will keep the system fed. If we
do not have that ready, we could fall behind other countries.
Q: Last year, IMS Health merged with Quintiles to become
QuintilesIMS. What are the resulting benefits and what new
services have been integrated into your portfolio?
A: We inherited clinical research services from Quintiles and
today we can offer its clinical studies portfolio for phases II
and III and our own for phase IV on observational studies.
Thanks to the merger, we have a stronger capacity to offer
follow-up services when launching a product. Of course, we
are still in the process of completing the merger.
Q: What role does Mexico play in QuintilesIMS’ global
strategy?
A: The country has the potential to become a pioneer for
clinical research and for launching new products. The world
invests around US$162 billion, Latin America captures
US$6-8 billion in clinical research and Mexico could attract
a bigger slice of that pie. The goal is to make this innovation
available to the medical community by integrating it into
institutional purchasing.
Q: Which of your areas of operation attract the most focus:
information, technology or consulting?
A: Before QuintilesIMS, IMS Health participated in the
information segment and later it developed additional
businesses, with a consultancy department, technology
and design. With all the recent possibilities in information
management, the next step is to take advantage of the
technology tools that allow us to do analysis and answer
more questions about the effectiveness of treatments,
disease management and the efficiency of sales force
resources.
Q: How does QuintilesIMS approach its solutions to offer
added value for its clients?
A: Almost all our projects are tailor-made. We analyze the
efficacy and efficiency of the products each laboratory
EASING ACCESS TO INFORMATIONXAVIER VALDEZDirector General of QuintilesIMS
VIEW FROM THE TOP
QuintilesIMS is an American multinational company
offering intelligence solutions for clinical research and
commercialization services to help companies reach the
market in a faster and more cost-effective way
139
INSIGHT
No one can predict the future but Big Data provides
professionals with the kind of specific information needed
to make fairly accurate projections. In the healthcare sector,
Big Data can help detect dangerous trends and provide the
necessary knowledge to allow for decisive action that could
save lives. How effective it is relies on the velocity, volume,
variety and veracity of the information collected.
“Big Data is mobile, analytics, cloud computing and social
networks,” says Antonio Carrasco, CEO of Grupo PLM,
which specializes in Big Data for the healthcare sector
in 13 Latin American countries.
The company, which started 75 years ago as an editorial
house for the medical segment, collects medicinal
information from manufacturers and publishes the data
on its website, which visitors can search. In 2016, over
100 million health professionals clicked on Grupo PLM’s
Mexico website, Carrasco says. The site can handle over
2,500 searches per second and receives a variety of
information over its 35 digital channels.
“When talking about Big Data, it is necessary to include most
users in the sector, which is what PLM does. We have over
200,000 physicians working with our information on a daily
basis,” says Carrasco. The sheer number of doctors searching
the site’s resources gives the company ample data to analyze
and detect trends. “We are like a small Google because people
search for very specific medical information through us.”
PLM is also working with artificial intelligence or semantic
analytics. “We teach IBM’s Watson to understand what
is written on paper. This is semantic analytics. Artificial
Intelligence (AI) can begin reading a page and give you the
remaining information,” says Carrasco. Among its applications,
AI can recommend a dosage, inform a doctor if the prescribed
drugs will interact with each other or if there is a certain type
of food or environmental element the medicines will react to.
By detecting trends, Big Data can be used to improve
healthcare. Carrasco points to the 2017 flu H1N1 season as an
example. During the 2016 flu season, Grupo PLM noticed a
hike of 1,113 percent in searches for Tamiflu in February 2016 in
comparison with the previous month. “We knew there was an
epidemic because general doctors were desperately looking
for Tamiflu. Normally, this trend should be relatively steady but
the spike in searches was due to thousands and thousands
of patients coming down with the flu,” says Carrasco, adding
that in 2016, there was a scarcity of Tamiflu. “It was sold out
in all drug stores in Mexico because they were not expecting
an epidemic. The increase in searches for the drug was
atypical.” Carrasco adds that H1N1 was responsible for over
6,000 deaths in Mexico in early 2016. Sharing such data
could improve the detection of trends and ultimately improve
healthcare for patients. It would also enable companies to
improve treatment and their cost-efficiency.
Big Data helped identify the epidemic and action was
taken, Carrasco says. The patent for Tamiflu was expired
by COFEPRIS in March 2016, leaving the way open for
other companies to use the medicine’s active substance,
oseltamivir phosphate, to create generic versions of
the drug. In addition, the Mexican Ministry of Health ran
preventive campaigns throughout the country in winter
2016 to remind people to get their flu shot.
The flu is not the only trend Big Data can reveal. Carrasco
says PLM’s data has uncovered a number of surprising
results. One example illustrates his point: the majority
of specialists searching for erectile dysfunction drugs
are gynecologists. “Erectile dysfunction is a couple
problem, not a man problem,” Carrasco says. “That is
the advantage of Big Data: discovering something you
never would have thought of.”
SPECIFIC INFORMATION UNVEILS GENERAL TRENDS
ANTONIO CARRASCOCEO of Grupo PLM
Grupo PLM noticed a hike of 1,113 percent in searches for Tamiflu in February 2016 compared to January
140
can be of two months or more; digitalization can reduce
that. This allows other savings, such as with fees related to
incapacitations, which can be lowered as a result of having a
patient diagnosed more quickly. A timely diagnosis can save
lives. Doctors can see more details on digital images, zoom
in, analoguely track changes, change contrast, brightness
and carry out a faster and more precise diagnosis. If needed,
a doctor can ask for a second opinion from a colleague
who can access the image remotely, avoiding the need to
transfer patients between hospitals.
Q: What is the next step to expand healthcare digitalization
in Mexico and what role does Eseotres want to play in this
process?
A: Image digitalization opportunities are infinite and
we have seen this on our mobile devices. Soon, our
medical history will be on the cloud. What will change is
the selection criteria of patients because we will prefer
institutions that can upload our clinical information to a
shared platform. For these solutions to be as effective
as possible, these platforms should be cross-institutional,
private or public, and cross-manufacturers. Eseotres
wants to be the platform where these changes happen.
We want to develop a cloud without institutional, brand or
manufacturer barriers. The vast majority of imaging studies
done by public health institutions is archived in boxes.
Through digitalization, the studies’ archives can be easily
retrieved and shared and become a source of Big Data
to develop useful information for the creation of health
policies, efficient resource allocation and productivity
measurement. Public health institutions are doing what
they can but it is important that we as business do our
part to facilitate the adoption of these solutions. It is unreal
to think that one company can satisfy the entire public
demand alone and the same goes for other public health
institutions; this is why the technical standardization of
these solutions is a priority. We need to make sure that any
solution that we install anywhere in Mexico can connect
to any other solution in the market.
Q: You are a former Walt Disney Home Entertainment
executive. How do you apply that expertise to healthcare?
Q: What process does a clinic undergo once it hires your
digitalization services?
A: The success of these kinds of solutions relies on how
well they are designed according to each customer’s
specifications. There are many variables to take into account
that will define the optimum design: the existing medical-
imaging equipment, its operating status, a hospital’s
infrastructure, human resources, current volume of studies
per type and its growth projection. We begin by sending
an engineer to do a survey of the situation and assess what
growth may look like for the following one to two years
in terms of demand, new equipment, specialties and new
health units. This will determine the type of hardware, its
capacity, infrastructure adjustments, software and tools that
will better suit today’s needs and those in the medium term.
Part of our added-value is the ability of our engineers to
design a custom-made solution ready to scale up to the
client’s future plans. Another differentiation factor we offer
is service. We train all a customer’s staff that will operate
or interact with the solution. We continue to provide
training over the term of the contract to compensate for
employee rotation and natural knowledge loss and we focus
on preventive maintenance to anticipate system failures,
new needs and to avoid operating downtimes. This is also
empowered by our expertise, which is our biggest strength.
Q: What can digitalization mean for a company in terms
of savings?
A: When technicians take an image with analog film, they
check the image’s clarity with a radiologist and decide if
the image should be retaken. Twenty-five percent of analog
studies have to be repeated, which means that patients
have to be irradiated twice, 25 percent of films are wasted
and the x-ray tube is used 25 percent more. Appointment
deferrals for image studies are another big problem of
analog technology because in some cases these deferrals
DIGITALIZING THE FUTUREGUILLERMO FERRARIGeneral Manager of Eseotres
VIEW FROM THE TOP
Eseotres is an engineering company that provides
diagnostics solutions. It is a former x-ray film provider now
focused on providing services for the digitalization of x-rays
in medical institutions
141
their own budget and government. We have applied our
solutions in 19 hospitals in San Luis Potosi and 29 in State
of Mexico, where we want to finish the digitalization of the
units that still use analog film processing. The results in
these clinics have been great, they have radically increased
their productivity as a consequence of the technology itself
and the reduction of service downtimes, and there is an
impact on the diagnosis quality as well.
Q: What are the challenges of digitalization in Mexico?
A: The first challenge is to achieve a cultural acceptance of
change, to break the barrier of resistance to install solutions
whose end product is digital and not tangible. Our clients
have been working 15 to 20 years in the same way so it
is not easy to make them embrace change. Working with
public institutions presents other challenges. Budgets
need to be reassigned, to adjust to service contracts.
Tenders often do not have a proper budget to contract
the needed digitalization services. Some budget items,
such as those assigned to the maintenance of old film-
developing processors, should be assigned to the digital
imaging services. In addition, the process of tenders
is complicated as there is a lack of standardization and
technical specifications often do not match the real
customer’s needs, they also require the presentation of
past contracts with public institutions to demonstrate the
company’s expertise; this is a bit contradictory when we
consider the few contracts for this kind of service that the
public institutions have signed.
This is why we received with great anticipation the IMSS
Innovation Olympics, an event that IMSS launched in
March 2017 for the first time. We see this competition as
a key aspect that was missing for IMSS to properly adopt
innovation; a space where the public and private sectors can
transparently team up to develop innovative solutions that
are tailor-made to fit the reality and needs of the institution.
A: The shift from home entertainment media to medical
imaging was drastic. However, sometimes there are
similarities within seemingly very different industries.
When I started working at Disney, movies were sold in VHS
and DVD before digital arrived. Video on demand, digital
download, streaming and other forms of digital distribution
generated changes within the company and at an industry
level; new and different partners, business models, different
pricing, marketing, operations as well as a different meaning
of product ownership to the retail and to the end customer.
Something similar happens in the medical imaging industry.
We went from selling X-ray films to offering digital-
imaging services, from selling a consumable to selling an
intangible digital image. Therefore, this similarity with the
industry I come from helps me understand how important
this change is for the industry, how deeply it affects the
different stakeholders and what can we do to be prepared
to embrace and take advantage of that change.
Q: How has the adoption of digitalization in the health
sector evolved in Mexico?
A: IMSS carries out between 19 and 20 million image studies
every year. We are still its providers of analog films and
they still buy around 1.5 million square meters. We believe
that only between 25-30 percent of its imaging studies
are digitalized, so there still is an important opportunity to
broach. However, it has to standardize their process. There
are around four or five companies offering solutions similar
to ours. The most digitalized countries are looking for, or
have already adopted, a digitalization solution where the
images can be shared among different institutions. IMSS is
the biggest health institution in Latin America and it will
be a great advantage if at some point it could have the
information of all its patients in the same platform available
for all its clinics, and moreover, such a platform should also
be shared across health institutions. The High Specialty
Medical Units (UMAES) are already digitalized; they have
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institutions. Laboratories and diagnostic centers are also
evolving. INEGI indicates there are over 13,000 laboratories
and diagnostic centers, with Chopo and Laboratorio Médico
Polanco being the largest.
Q: How can various levels of the healthcare sector help
combat chronic disease in Mexico and Latin America?
A: We are no longer in the era of large infrastructure
ownership. Contemporary economic models such as
Uber, Airbnb, Instacart and Rappi demonstrate that
specialization, sharing and collaboration are valued
and sought by customers. The first step in generating
efficiencies lies in the ability to measure actions in a
standardized manner across systems. This means, for
example, measuring the number of procedures conducted
by hospitals with the same codes, preferably ICD-9 or -10.
Only once this is accomplished will the various healthcare
systems be able to communicate effectively and efficiently
among themselves.
Q: What steps have been taken to prepare for the future
burden of senior citizens in Mexico and Latin America?
A: Private institutions are the most active and dynamic in
seizing such opportunities. Furthermore, medical device
and equipment manufacturers continue to develop
homecare solutions, giving the elderly the opportunity
to receive care in their home and from their loved ones.
Payers should soon recognize that such solutions help
reduce the financial burden of care and present viable
alternatives to improving their margins.
Q: Last year you said that investing in hospitals is not a
solution to the burden of an aging population. What are
the alternatives?
A: As it pertains to the aging population, we will see two
major trends play out: expansion of private care facilities
that focuses on enabling an aging population to maintain an
active lifestyle and live with dignity. There is a growing interest
in homecare solutions that enable the aging population to
receive care within the comfort of their home surroundings. A
third and underlying element will be the organic growth and
expansion of laboratories and diagnostic centers.
Q: How are GHI’s sales divided between intelligence and
consulting services? Which services are most in demand?
A: GHI has three business lines: its hospital demographics
database, which is the world’s largest hospital database
focused on Latin America and covers 14 countries and
over 15,000 hospitals regionwide; assessing market size
and share for medical devices and equipment in Mexico,
Colombia, Brazil, Argentina, Chile and Peru, among others;
and customized consulting assignments, the design and
execution of consulting research specific to the needs of any
client, including strategy definition, competitive intelligence,
customer profiling and interviews with key opinion leaders.
In 2017, the business was well-balanced between these three
service lines and we expect this to continue in years to come.
Q: How does GHI handle the big data it gathers to develop
market analyses and databases? How does it ensure data
protection?
A: We have invested in creating proprietary IT systems and
platforms to meet our unique data-gathering needs, which
enables us to validate previously collected information as
well as collecting new data points. Our systems also enable
us to scale horizontally to other countries and regions, as well
as expand vertically into other fields of application, such as
laboratories and diagnostic centers. So far, we have not heard
of any other company in Latin America with such robust,
time-tested tools.
Q: How are hospitals adopting information technology
infrastructure and what specifically is of interest?
A: Generally, hospital IT is a hot topic. Hospitals are
increasingly interested in electronic medical records, system
integration and the move toward digital equipment. Hospital
adoption of such technology is growing from a small base,
starting in the private sector. In the public sector, efforts
are being made to standardize systems across the multiple
PROPRIETARY IT SHINES LIGHT ON HOSPITAL DEMOGRAPHICSGUILLAUME CORPARTFounder and Managing Director of GHI
VIEW FROM THE TOP
Global Health Intelligence (GHI) is a US-based business
intelligence firm focused on healthcare analysis in Latin
America and Asia. GHI developed the world’s largest hospital
demographics database focused on Latin America
143
NEW TOOLS TO ACCESS THE PUBLIC
MARKET
José Ferreyra President of the Pharmaceutical
Research of IIIFAC
Enrique MartínezDirector General of IIIFAC
Q: What have been IIIFAC’s biggest challenges and
opportunities over the last year?
JF: We worked to create a database of Big Data on
purchasing behaviors in the public pharmaceutical market
and we developed a multiplatform business-intelligence
system covering over 70 million unitary registries. The
database contains information about each drug available
in the market, such as the contract value, the consumption
and inventories, as well as the number of prescriptions, in
more than 100 public-sector institutions. Today, more than
45 pharmaceutical companies in the country are using it.
Q: In what areas is innovation more prevalent in the
Mexican pharmaceutical industry?
JF: We believe that our business intelligence system
enables our clients to predict market movements.
For example, we saw last year that ISSSTE requested
approximately 237,000 units of duloxetine but we saw in
our business intelligence that months before, ISSSTE had
decreased the authorized consumption of duloxetine to
practically zero. We are committed to working with our
clients to resolve these inquiries. We also launched market
research on the consolidated tender results published
in June 2017 in which we were able to recognize which
product categories IMSS is over-purchasing and predict
which of these categories will not reach 100 percent
consumption over the year.
Q: What advantages can this system provide regarding
the provision of healthcare in Mexico?
JF: The access to this information will raise awareness
about the current model of health administration. For
example, we all know the advantages of early insulinization;
however, IMSS continues to treat patients with Metformin
because it is cheaper and reaches a wider range of the
population, although its continued use causes pancreatic
insufficiency. The institutions have to choose between
purchasing expensive drugs that delay the progression
of a disease or cheap medicine that can only help send
patients home. Article Four of the Mexican Constitution
says that citizens have the right to medical care but does
not state that their life is above an assigned budget.
The Institution for Pharmaceutical Research and Innovation
(IIIFAC) offers information and educational services for the
pharmaceutical industry in the public Mexican healthcare
system through in-person courses and digital applications
Q: IIIFAC offers a certification in access to public health
institutions. What training needs have you recognized?
JF: There is a dramatic need for specialization. Pharmaceutical
companies have recognized that there is not much growth
with private clients and one representative in the government
can be as rentable as 17 in the private sector. Therefore, most
of our students are representatives of the pharmaceutical
companies who we are helping shift from the concept of
medicine based on experience to medicine based on existence.
Government physicians do not have freedom of prescription
but they are subject to the authorized basic chart of what is
available at the time of prescription. Therefore, executives
should be able to sit down with the directors of the public
institutions and talk about costs and benefits.
Q: What are the main objectives for your institution in 2017?
EM: Increase our client base and continue our certification
program to strengthen our presence as a research institution
in the healthcare sector. We expect that in five years the
public sector will represent 60 or 70 percent of the units in
the market in Mexico and that, at that point, there will be a
health reform that insists on the regulation of data, which is
very important to health economics models.
Q: What are the industry’s expectations for current
pharmacoeconomic strategies?
EM: The industry is focused on the consolidated purchase.
This is an interesting initiative because it allows better prices
and fewer processes to acquire medicines. However, there
are some issues. Consolidated purchasing does not mean
access to drugs for the population. The purchases only
represent between 50 and 60 percent of the market and the
main institutions, such as IMSS and ISSSTE, do not reach 70
percent. In the end, the consolidated purchase is focused only
on saving money and not better service because the prices
demanded of the laboratories are not sustainable for them.
VIEW FROM THE TOP
144
medicinal treatments in Mexico through the use of our
telemedicine solutions.
Q: To what extent will the courses be adapted to other
Latin American countries?
A: The courses themselves are to be presented in Spanish
and include localized mentions of technologies used in
the region for professional opportunities. As we connect
education and labor, we trigger the pragmatic learning
path and refocus on action. We combine our efforts with
other institutional organizations and take several factors
into consideration, including connectivity, local access to
the technologies mentioned in each course and the rate at
which these technologies are prospering locally to create
an effective impact on local communities.
We firmly believe that to incite foreign investment in
Latin America it is our responsibility to fully engage in
the development and expansion of our own infrastructure,
culture and society. We face a challenge to mitigate the
current brain drain situation as well as the flight of capital
and it is entirely in our hands to assemble a proper Latin
American industry to advance. We are able to accomplish
this as the local education level rises with a globalized
vision in various industries with the use of technology but
we need to pay attention to the rate at which these and
other efforts echo across communities and see to their
implementation.
Q: What methods are you implementing to maintain
high follow-through rates and what tools will you use to
encourage people not to give up?
A: As we learn from our development, we come to
understand that e-learning deals not only with the quality
and variety of the educational content provided but also
with how education itself is made available to the users.
Having access to on-demand online education is not a
choice but a necessity in our current lifestyle because it
allows students to have a malleable management of time
while being able to move forward with their academic
enrichment. As education shifts to a more personalized
experience, we are inclined toward versatility for
Q: How is Astrum Salud positioned to take advantage of
advancements in global connectivity?
A: We have formed solid commercial and academic
alliances with various organizations across the globe to
offer better solutions to our users in health, education
and communication services. This has further improved
our overall service quality by giving it a globally
competitive edge. We have recently allied with CloudVisit,
a prominent New York-based IT development company
with vast telemedicine experience, to create a reliable
and integrated videoconferencing CMS implementation,
exponentially empowering our secure IT development with
pristine tropicalized services at competitive prices.
Our alliance with the New York-based organization Life
Extension Advocacy Foundation has developed new and
better ways of providing educational and informative
content in Spanish, closing the gap for Spanish-speaking
communities and enabling them to learn, engage and
support other prominent organizations in the life sciences
industry. We emphasize that education is a prime concern
in improving healthcare in the modern world and it must be
addressed correspondingly to be offered in an accessible
and effective manner. This is the reason we have focused on
malleable digital implementations for education, allowing
us to adjust accordingly to technological advances.
Q: What are the goals of your latest project Astrum
Educación?
A: We have established a coalition with the World
Academy of Medical Sciences, an inspiring institution
based in the Netherlands, that allows us to provide online
services in Spanish for continued medical education and to
cooperate on congresses and seminars. We can also offer
our videoconferencing platform to the academy’s medical
members. This will extend access to novel treatments to
Latin America, allowing the region to move forward in
clinical science as e-learning consolidates and knowledge
spreads. Astrum Salud has also formed relationships with
cutting-edge biotechnology entities such as RegenerAge
Clinic in Mexico City and Bioquar in Philadelphia. The
goal is to expand the reach of revolutionary regenerative
MODERNIZING HEALTH TECHNOLOGYALEJANDRO DE LA PARRADirector General of Astrum Salud
VIEW FROM THE TOP
145
the future. Our dedication and focus will teach us the
best way to coincide with the government for the sake
of our communities.
Q: Astrum Social has been live since June 2016. What
results have you seen so far?
A: Astrum Social is a social network platform that involves
the sharing of knowledge, emotions and experiences that
reflect the current Latin American view of health and
wellness around the world while also directing the vision
of where it is going in the future. The platform allows users
to interact with content provided by other users and to
communicate with each other with the ability to create
personal profiles, groups, dedicated pages, and also be
able to play games, listen to music and watch videos,
all focusing on promoting a healthy lifestyle between
its users. All users see the Astrum feed on their home
page, which offers diverse, educational and informative
content related to health and medicine to stay updated
while interacting with other users. Users can create bonds
and meet in person while being collaboratively proactive
about their health.
After we launched phase one of the platform, we received
productive feedback from our limited user database and
have redesigned certain features, fixed minor bugs and
reconditioned our news feed according to comments.
Additionally, we have implemented an enhanced music
store that allows users to purchase content from different
artists and therapists focused on mindfulness, music therapy
and meditation. As we expand these features and include
products and services from our other branches, such as
Astrum Educación and Astrum Móvil, we aim to deliver an
integrated social ecosystem that encompasses both the
social and commercial value that digital infrastructures often
provide. We are in production release, as we say in the IT
development sector, but we are always fine-tuning to focus
our global vision on how to provide access to better health,
better education and to push social development forward.
Q: What are the main projects you will be focusing on
this year?
A: In healthtech, we will be acclimatizing our telemedicine
services for particular conditions and diseases to be able
to extend the benefits of our platform. We are proud to
serve an all-encompassing digital solution for diabetes
patients as well as a program for obesity, both of which
we will be launching during 2017.
knowledge acquisition which, in turn, means we enjoy
better follow-through and retention rates as students
have a chance to complete studies at their own pace. This
approach involves simplifying how each student is able to
enroll in a course, interact, acquire knowledge and how the
student gets certified. The process is being structured to
allow automated operations for a fluid and convenient way
to benefit from online education. As we also focus on basic
education, our content is provided with a gamified spirit,
allowing younger audiences to be introduced to medical
science in a fun and energetic manner.
Q: How are people receiving new online-education
platforms and how are they adapting to e-learning?
A: The efficacy of online education is a proven fact as it
encompasses a more immersive and interactive experience.
It has been restructuring society for over a decade now.
Online education has been disruptive and repercussions
are seen worldwide in formal e-learning and also with
non-formal, concomitant knowledge acquired from mixing
modern entertainment content with access to global
information. As larger segments of society organically
adopt these new information channels, we believe that
this is the perfect time for LATAM to invest and harness the
power of a broadened and more pragmatic approach to
resolving our needs with the use of both formal and non-
formal online education. The technologies we use have
been in use in the e-learning community for decades, but
we are always looking to combine new and more effective
alternatives with our current development.
Not only does the student need to adapt to e-learning
but so does the instructor. In our experience, instructors
have had a harder time embracing these new ways of
providing access to knowledge; they are increasing
their own adeptness at the same time as the student.
This is the reason we invite LATAM academics to dive
deeper into globally available online education. As the
intercontinental mission to better educate society is
rapidly being redefined, providing the lens through which
each community interprets information requires even
more direction and objectivity. We are always excited
to strategically address these issues in conjunction with
other entities and open our doors to innovative education
initiatives around the world.
Q: The largest education and healthcare provider is the
government. Do you have plans to work with it?
A: Indeed, the government sector has a categorical role
in both education and healthcare. Combined efforts with
the private industry have helped to build the foundation
of our government infrastructure. On that account, we are
and will continue to be active in undertaking collaborative
initiatives with governmental bodies to plan and act for
Astrum Salud is a Mexico-based company specialized in digital
solutions for the Latin American community in communication,
measurement and health. It has designed and runs dozens of
health-related apps, bringing services to the wider community
146
of service. In addition, we give them a lower cost so that
they can access the same platform. We have attended over
3,000 walk-in patients in our physical office and around
200 have acquired the program for the management of a
chronic disease. We are also working with two companies
through our B2B model, one with 6,000 clients.
Q: What is the added value Salud Cercana brings to the
Mexican healthcare system?
A: In dealing with chronic diseases, patients need
behavioral changes, so we help those patients find
the right professional to treat their condition. We are
managers of chronic diseases. This is our priority and we
would like to work with the public sector on managing its
population with chronic diseases. We also want to reduce
out-of-pocket expenditure on medication and coverage
of chronic disease complications. Ninety percent of the
Q: What is Salud Cercana’s role in the Mexican healthcare
system?
A: Salud Cercana is a digital platform that integrates health
services. We are a patient-management system especially
focused on patients with chronic diseases that enables middle
and low-income patients to find doctors who are certified by
Salud Cercana and who belong to our network. In addition,
our patients can interact with nutritionists, psychologists and
a special figure we call a care coordinator, a wellness authority
and supportive mentor who motivates individuals to cultivate
positive health choices. The lack of care coordination is one of
the biggest issues in the Mexican healthcare system and there
is a large amount of money wasted on the public system and
out-of-pocket expenditure due to bad coordination.
Q: Salud Cercana is the first prepaid healthcare system
in Mexico. What is the protocol when a client acquires
the service?
A: Once patients download the app and accept our terms
and conditions, they can go to any convenience store in
our network or any payment center and prepay the service.
After verifying the payment, the care coordinator connects
with the patient and explains how the platform works
and the benefits of the acquired service. The coordinator
also schedules the first interview with a doctor in our
network to create a clinical record. The first appointment
is covered by the initial payment and after that the care
coordinator will schedule a phonecall with a nutritionist
and a psychologist to design a personalized plan that will
then be monitored by the coordination team. Additionally,
the care coordinator will be in charge of tracking all
customer contacts, clinical records, doctor appointments
and prescriptions, as well as laboratories and required
prescriptions. Our platform has an embedded chat that
patients use to ask questions, participate in forums, read
relevant content and follow up on notifications with their
nutritionist, psychologist and care coordinator.
Q: Who are the specific beneficiaries of Salud Cercana?
How many people are already using it?
A: Right now, most of our users belong to C and D
socioeconomic strata because they cannot afford this type
MANAGING HEALTH THROUGH DIGITAL AIDSSANTIAGO OCEJODirector General of Salud Cercana
VIEW FROM THE TOP
SALUD CERCANA'S COORDINATED HEALTH PROGRAMS (PCS)
The purpose of the PCS offered in the application is to help patients adopt healthy habits. Through these programs, users have access to a community of hospitals and pharmacies that help them save money and to certified specialists, providing all the tools to optimize health and save on expenditures. The platform offers five PCS:
Basic for people with specific health goals who wish to improve their success with the support of a coordinator.
Nutrition
for people who wish to change their eating habits to reach their ideal weight, maintain it, increase their satisfaction and welfare and reduce the chances of developing a chronic disease.
Mind
for those who seek better emotional health and need support to control stress, effectively overcome grief, reduce anxiety, overcome a chronic disease or episodes of depression.
Equilibrium for those who want to change their lifestyle with the help of a nutrition expert, a psychologist and a physician.
Medichatfor people who do not require an urgent diagnosis or treatment but who wish to receive advice from certified professionals.
Source: Salud Cercana
147
Q: How is Salud Cercana’s initiative contributing to the shift
to preventive medicine?
A: We are focused on secondary prevention, which
means we help patients who are already diagnosed
with a chronic disease to access care more quickly and
avoid complications. However, our platform is focused on
preventive care. We also know that companies suffer when
their employees get ill so we are developing preventive
strategies with our B2B clients.
Q: What regulations do you follow?
A: Dealing with health data requires following regulations
closely. We are careful with our terms and conditions and we
have invested heavily in protecting information. COFEPRIS
has also set specific guidelines for primary doctors to
provide consults, so we help our doctors comply with the
requirements of having a physical office, an exploratory area
and gathering patient information. As a healthcare company,
we are aware of legal requirements and we know how to
monitor them.
Q: What are your growth expectations for 2017?
A: First, our target is to expand our network of doctors and
our geographical coverage. Secondly, we want to reach
10,000 app users with PCS. Third, we will grow our network
of other providers such as laboratories and pharmacies,
integrating our services with theirs. We are working on
agreements with labs so when our patients go to them, the
labs send us the results. In the end, that follow-up is the value
we provide. Our goal is to work with at least 10 companies by
the end of 2017, managing both clients and patients.
population has access to public health, but 50 percent of
expenditure in Mexico is out-of-pocket. Lastly, our main
long-term goal is to achieve an integrated healthcare
sector and we want to be the platform from which we
can manage all patients health and integrate services
around them.
Q: What business models are you using for your operations?
A: Salud Cercana has a B2C and a B2B channel in which it
works directly with companies. Both have the same goal: to
manage patient health. In the B2C model, single users pay
for coordination, nutritional and psychological support and
patients can have access to doctors at discounted prices. They
pay MX$900 (US$50) for our basic plan for a three-month
process, MX$1,700 (US$94) for psychology and nutritional
support and MX$2,300 (US$128) for the complete service.
The price is around MX$150 (US$8) and MX$250 (US$14)
a month for receiving all these services. In the B2B channel,
the price varies depending on what type of coverage the
company wants to offer to its workers; it might vary from
MX$75 (US$4) to MX$150 (US$8) a month.
Our business models adapt to every type of company, but
our main source of revenue is the care coordination program
(PCS), which is the added-value we bring to the market. In
the future, we want to work with insurance companies and
government institutions through this service.
Q: How do you recruit talent to Salud Cercana and how
do you establish the relationship with doctors?
A: We have used traditional recruiting platforms and located
doctors through word-of-mouth. We have also attracted
talent by networking with doctors in the private and public
sector and with nutritionists and physiologists. We have to
be careful in this selection process because we need to train
the talent we attract on how to use our platform and how
to deliver quality through the service we offer.
Salud Cercana is a Mexican company founded in 2015 that
provides a healthcare app for people with chronic diseases.
It is focused on simplifying access to health services from
the cell phone
0
20
40
60
80
100
Oth
er p
ublic
serv
ices
Pri
vate
Fed
eral
heal
th s
ervi
ces
ISSS
TE
IMSS
7064
91
32
42
AVERAGE WAITING TIME PER MEDICAL VISIT (minutes)
Source: ENSANUT 2016
2,529 PATIENTS SURVEYED
BY ENSANUT 2016
MEXICO - FREIGHT MODE BREAKDOWN 2017 (%)
air
Rail
Road
DISTRIBUTION OF PATIENTS WITH A PREVIOUS DIAGNOSIS OF DIABETES, HYPERTENSION, AND DYSLIPIDEMIA IN MEXICO’S HEALTH SERVICES
Source: ENSANUT 2016
� 33% IMSS
� 32.7% State health services
� 26% Private
� 5.6% ISSSTE
� 2.7% Other public services (PEMEX, SEDENA, SEMAR, etc.)
148
performance. We are in an era of change and GE is planning
on leading that change. We used to talk about IT, now we talk
about operation technology, a step further than IT because
it is the way to understand how to manage information for a
determined operation.
Q: What benefits could GE digitalization bring to the
healthcare system?
A: We try to bring more efficiency and productivity to our
portfolio through our new platform. The value of our digital
proposition is focused on service provision and control and
maintenance of our clients’ assets. For example, GE Health
Cloud is a product designed to integrate clinical workflows
while managing the volume, velocity and variety of healthcare
data. It will be capable of connecting to more than 500,000
GE medical imaging machines and more than 1.5 million
imaging machines worldwide, linking to millions of other
healthcare devices including patient monitoring, diagnostics,
anesthesia delivery, ultrasound, mammography and various
data sources. The future is not about having an application
in a machine, it is about getting the information produced by
the machine in a cloud and working with it. We have launched
the application of Predix internationally, while in Mexico and
Latin America we are taking the first steps in healthcare. GE’s
main engineering IQ research center is in Queretaro with a
multidisciplinary team for healthcare development. The
platform has been developed under standards that address
GE policies and each country’s regulations.
Q: What are your main objectives in Mexico for the
coming years?
A: There are three main targets for the next three years. First,
we want to be acting and delivering as a digital healthcare
company. Then, we want to ensure profitability for our
shareholders through healthy growth. Next, we want to make
GE Healthcare Mexico an opportunity for talent. We want the
best people for a better understanding and performance.
These three objectives meet because if we are profitable,
we can focus on innovation and think about developing
talent. Talent leads to a better development, which leads to
possibility for innovation. There is a lot of talent in Mexico and
we need to attract it to our company.
Q: Mexico must shift to preventive medicine, which is GE’s
main focus. What are you doing to guarantee patients
access to it?
A: Prevention is fundamental to us and the public sector
should be spending on this. Expenditure will never be
enough but this only requires us to be more effective and
find a way to optimize the value of our offer. Our portfolio
is focused on diagnosis and includes different modalities:
magnetic resonance, computed tomography, ultrasound,
mammography, x-ray, life-care solutions, life sciences and the
information systems that support this. Our strategy is focused
on diagnosis and there are three pillars for us: first, we aim
to provide accessible costs and quality by creating products
affordable for each country to reach coverage; second, we
work on the client-provider relationship, we never work
alone and we always need the support and confidence of
our partners and third, we support PPPs, which will help us
reach more patients.
Q: Last year you mentioned that projects for GE will be
focused on the digital realm. What advances have been made
in the shift to digital?
A: The main leaders of the company and business areas
are committed to transforming GE into a digital industrial
company. GE Store is our name for the company’s competitive
advantage. There is no other company that has the ability to
transfer intellect and technology across industries and around
the world as GE can; from advanced technology, materials,
software and analytics, to commercialization, process,
and business model best practices. We also have our own
operative system for the industrial internet, Predix, that is
transversal for all GE businesses, including healthcare. The
platform enables us to manage the information we gather over
the years and make it available to our clients. By connecting
industrial equipment, analyzing data and delivering real-time
insights, Predix-based apps are unleashing new levels of
MEXICO READY TO SHIFT TO DIGITALMARIO AMADIOPresident and CEO of GE Healthcare Mexico
VIEW FROM THE TOP
GE Healthcare is the pharmaceutical and medical devices
division of the US-based company General Electric. It is a
world-leader in services in medical imaging and information
technology for diagnostics
149
INSIGHT
A decade ago, the arrival of smartphones also introduced
the world to the app. Today, millions of apps permeate
mobile platforms and among the most popular are those
related to health. Maciek Drejak, CEO of Northcube and
Founder of Sleep Cycle, an app that wakes users during
their lightest phases of sleep, says the increased use of
technology and the advances of Big Data can help improve
a variety of conditions, including those related to sleep.
“[Health apps] help users quantify their sleep data. They
give users all the information they need to find ways to
improve their sleep and follow up on progress,” says Drejak.
Sleep tracking has become a world trend and with millions
of users worldwide, Sleep Cycle, developed by Swedish
company Northcube, is among the most popular. Sleep
Cycle alarm clock has been available for download since
2009 and is used to track sleep patterns. Users can add
sleep notes such as “drank coffee” or “worked out,” to figure
out what habits improve their sleep quality and which ones
are detrimental.
“Sleep Cycle alarm clock iOS features a patented state-
of-the-art sound analysis technology that records sleep
patterns. During sleep, our movements vary with each
sleep phase. Sleep Cycle alarm clock uses the phone’s
microphone to identify sleep phases by tracking movements
in bed,” Drejak says. The app then analyzes sleep, records
its findings and wakes up users during their lightest sleep
phase, using a predefined 30-minute alarm window.
In the modern on-the-go world, getting the right amount
of adequate sleep can be difficult. A study carried out by
UNAM shows that 35 to 40 percent of Mexicans have sleep
problems that have been linked to further health problems
such as overweight and obesity.
In addition to looking for the specific sound-fingerprint of
bed sheets moving, several other filters are deployed in
the app. It detects and filters rhythmic, reoccurring sounds
such as breathing and snoring, in addition to certain specific
sounds that are problematic for the fingerprinting system
like those of Continuous Positive Airway Pressure (CPAP)
machines, a breathing apparatus used by those who suffer
from sleep apnea.
Sleep Cycle can help detect differences in the population’s
sleeping habits due to its bank of sleep notes and due to
the feeling of happiness users input upon waking. “Men
sleep less but wake up happier and have higher sleep
quality. Women sleep more but wake up in a worse mood,”
says Drejak.
SLEEP RIGHT: IMPROVING HEALTH WITH APPS
MACIEK DREJAKCEO of Northcube and Founder of Sleep Cycle
Source: https://www.sleepcycle.com/how-it-works/
01:00 02:00 03:00 04:00 05:00 06:00 07:00
Awake
Sleep
DeepSleep
DISTURBED SLEEP
Source: https://www.sleepcycle.com/how-it-works/
EXAMPLES OF SLEEP GRAPHS GENERATEDBY SLEEP CYCLE ALARM CLOCK: REGULAR SLEEP
Awake
Sleep
00:00 01:00 02:00 03:00 04:00 05:00 06:00
DeepSleep
Regular Sleep Disturbed sleep
Source: Sleepcycle
EXAMPLES OF SLEEP GRAPHS GENERATED BY SLEEPCYCLE ALARM CLOCK (time of day)
150
Q: Uhma Salud’s goal is to change life habits, a major
challenge. How do you achieve this target?
BV: We look to hack habits, for which there are three steps.
The first is imitation. We think that every decision we make
is based on an analysis of all the data we have available, but
many decisions are imitations of what is happening around
us. What we do at Uhma is institute policies such as not
allowing sugary drinks. We also promote the use of stairs
instead of elevators and we replace biscuits in meeting
rooms with vegetable snacks. Although Mexicans drink
many sugary drinks, by putting water coolers in the office
and handing out bottles of water we generate behaviors
that workers start imitating. Second is the theme of co-
responsibility. We build dynamics in which we ask people
to generate changes with the help of their co-workers.
When planning to run a marathon, the first step is not to
buy running shoes but to sign up and tell all your friends
so that you cannot back out. This engagement is known
to be effective in acquiring healthy habits. The third part is
gamification. During the first biometric assessment, we give
individuals an objective. People who achieve these goals
receive a prize, such as an extra paid day off work or they
get to leave work early or arrive later. Of all the methods, that
linked to punishment saw the greatest results and, although
at first participants were the least happy, after three months
they were the most satisfied with their wellbeing program.
RG: On average, they lost 1.5kgs per person in three months,
which multiplied by the number of participants is a huge
amount of burned fat. The theme of work culture is clear and
this will generate much value in the future. The demographic
bonus in Mexico is about to explode. This will impact
companies as talent will become scarce and more expensive.
Not everyone will choose jobs based solely on salary. These
intangible benefits will attract talent to companies and will
help with retention rates. A company with happy, healthy
employees is a better place to work and will attract the very
best talent, which will directly impact its results. We have seen
people’s perspective changing greatly. Previously, certain
directors saw our services as a cost. Not anymore. They see
them as an investment because they can check certain metrics
that generate a return. Once this is measured, they notice
the savings, including in recruitment costs. Retaining talent
will become a key and these programs will be a must-have
for companies.
Q: There are several startups that offer a similar service to
Uhma. What puts Uhma above the rest?
BV: We have invested greatly in technological development.
Our online platform, which enables us to perform a thorough
biometric assessment in five to 10 minutes, is the result of
eight years of work. There are other companies that offer
similar services but having invested in technology allows us
to operate more inexpensively and swiftly. Our competitors
operate manually, rather than having an automated process
like ours and their nurses take blood pressure, for example and
hand out the results written on a paper, which participants
then enter into a health-risk assessment manually. Their
participation rates are lower and the costs are higher.
Fortunately, our market is growing greatly. There are lists
showing that all the Fortune 500 companies have a wellness
program. Especially those in the top 10 or 20 take great care
of employee wellness and they attribute the success they see
to these types of programs.
Q: Of your three solutions, which has witnessed the most
effective results in improving employee healthcare?
BV: The portal enables us to follow an employee’s progress
remotely. It enables us to reach a large, geographically
dispersed population. Each person that enters the portal
has access to two telephone sessions per month with the
professional of their choice. Annual access to this service costs
MX$95 (US$5.20) per employee. The biometric evaluations
are what reveal the most information about the individual. In
2016, we performed 30,000 evaluations, all standardized. By
automating the process, we eliminate the risk of human error.
As a company we have performed more evaluations than even
the government through its ENSANUT survey.
VIEW FROM THE TOP
Uhma Salud develops wellbeing programs for the individual
employees of a client company. It measures their current
health status and potential risks to offer personalized
wellbeing plans
CREATING INCENTIVES TO IMPROVE WELLBEING
Roberto González CFO of Uhma Salud
Benjamín VillaseñorCEO of Uhma Salud
151
up, our devices are designed for all-day wear to show how
the small steps users take each day can have a big impact on
their health. We also know social connections help provide
the motivation and support that is fundamental to a user’s
health and fitness journey. For example, we have found that
Fitbit users with one or more friend connections move more,
taking on average 700 more steps than users without friends.
Based on aggregated and anonymous data from over 1 million
Fitbit users, we found that, on average, some users can be
sedentary for up to 90 minutes at a time throughout the day,
which is a significant amount of time for the typical 9-to-5
office worker. Getting up to move for even just two minutes
every hour can help chip away at those sedentary periods and
we have made it a point to encourage that with our Reminders
to Move feature. We know that every user has a unique set of
needs that requires different forms of guidance. With Fitstar
by Fitbit and Personal Goal Setting we are delivering a more
personalized experience with unique insights and guidance
to empower users to achieve their goals.
Q: Fitbit has partnered with Qualcomm and UnitedHealthcare
(UHC). What projects will these alliances develop?
A: We are thrilled with these new partnerships. In the US we
partnered with UHC to offer the top-selling Fitbit Charge
2 to members of UHC’s Motion program, an employer-
sponsored wearable device wellness program that rewards
participants with up to US$1,500 in reimbursements for
achieving specific health goals. This is the first time Fitbit
has designed a custom feature on a device and Qualcomm
played a role in providing technological capabilities and
horsepower. In the future, our two companies will focus on
new UHC health programs and services that incorporate
the latest generation of wearables, medical devices and
home diagnostic tests that utilize Qualcomm Life’s 2net™
Platform for medical-grade connectivity.
Q: How does Fitbit create user engagement? What makes
the company a fitness social network?
A: Fitbit has one of the largest online communities in the
world and the Fitbit app helps users find and engage with
family, friends and coworkers, creating positive network
effects that reinforce user engagement and increase
retention. As of the end of 2015, we had 16.9 million active
users worldwide, up 152 percent year on year. Our growing
user base has increased activity, taking 50 percent more
steps YoY in 3Q16. Over the past year, there has been a 98
percent increase in the number of users who have at least
one friend on the Fitbit platform and, on average, Fitbit users
have more than six friends, a 23 percent increase from 2015.
We are continually looking for new ways to encourage our
community to engage with Fitbit and each other. At CES
Las Vegas we introduced Community, a new section in
the Fitbit app that offers more ways for users to connect
with others to build on and inspire them on their path to
better health. Within Community, users will have access to
Feed, Friends and Groups, all with the goal of providing a
more appealing social experience. Feed is a new feature
that provides an engaging way to connect with friends,
family and groups of like-minded individuals so users can
find added support and inspiration to reach their health
and fitness goals. Friends easily connects users to others
across the globe where they can stay encouraged to climb
the leaderboard, as well as cheer, taunt and direct message
friends and family as they compete to get the most steps.
Groups lets users discover and join communities of like-
minded people to help support and inspire them on their
journey. They can choose from over 20 groups related to
fitness, nutrition, wellness and weight loss. Community will
be available later this year to all Fitbit users.
Q: How important is technology in creating a state of
health consciousness?
A: It is undeniable that technology helps us to be connected,
which is why Fitbit is introducing new tools that deliver
inspiration, personalization and smarter guidance to help drive
behavior change and maximize positive health outcomes. To
provide a complete picture of how a user’s daily activity adds
CONNECTIVITY INSPIRES FITNESSMELANIE CHASE
Director of International Product Marketing at Fitbit
VIEW FROM THE TOP
Fitbit is a US-based company that has been a pioneer and
leader in the connected health and fitness category for nearly
10 years, helping millions of people across the globe reach
their health and fitness goals
152
INSIGHT
AI PROVIDES DIGITAL ANSWERS TO TECH-SAVVY GENERATIONJAVIER CARDONACo-Founder and Director General of 1DOC3
Despite the efforts of the main health institutions, some
Mexicans are still falling through the cracks of the universal
healthcare system. E-health services, such as 1DOC3, are
helping to fill the gap as an easy alternative to face-to-face
doctors’ appointments, fueled in part by improved artificial
Intelligence (AI) and the rise of a tech-savvy generation.
Services such as Colombian start-up 1DOC3 deliver answers to
simple medical inquiries for free, providing basic, specialized,
medical information. “We have become a family doctor to
whom young people ask questions from their phones,” says
Javier Cardona, Co-Founder and CEO of 1DOC3. The e-health
company entered Mexico about three years ago and provides
tens of thousands of users with free medical information daily.
“1DOC3 has grown incredibly. The potential of the health
industry is large in terms of efficiency and savings and
increasing people’s access to services over the internet,” says
Cardona. According to Statista, revenue in the e-health market
worldwide amounts to US$9.8 billion in 2017, of which only
North America accounts for US$3.3 billion and Mexico US$147
million. Thus, Mexico comprises 1.5 percent of the global
e-health revenue and 4.4 percent of the regional. Statista
forecasts that by 2020 the Mexican e-health market volume
will increase to US$265 million.
Mexico has the highest rate of adolescent mothers in the
OECD, with a teenage fertility rate of 65.7 births per 1,000
women in 2014, according to the National Population
Commission (CONAPO), while the National Center for
Prevention and Control of HIV & AIDS (CENSIDA) reported
706 new registered cases of AIDS in 2016, so it is not surprising
that sexual and reproductive health are the most requested
topics. Diabetes, the second-most common cause of death
in Mexico, at 98,521 in 2016, according to INEGI, is the second
topic on which Mexicans inquire. The inquiries made on 1DOC3
fit the Mexican demographic and epidemiological profile. The
app allows low-income people aged between 17 and 27, the
main users of this service, to solve some health inquiries.
The success of 1DOC3 is a consequence of a solid investment
in developing AI, which has helped the app’s user platform
triple between 2016 and 2017, up to a million users a month.
Through a series of algorithms, inquiries are processed in
fractions of seconds. Typed questions are compared by the
AI with previous inquiries. If a match is found, the user is
directed toward that answer. “Ninety-nine percent of inquiries
match previous answers,” says Cardona. If no matches are
found in the database of solved inquiries, the user sends
the question and waits between 40 and 90 minutes for the
answer from a professional physician.
Questions presented by Mexican users are answered directly
by one of the 10 Mexican physicians employed by the
company, a strategy that aims to provide the best possible
answers to users of each nationality and to provide a better
user experience. Answers follow what Cardona calls the
ABC Protocol: confirming and clarifying the user’s problem,
providing medical grounds for the answer physicians provide
and concluding what recommendation is most suitable for
the user. 1DOC3 does not provide diagnoses but rather, gives
basic recommendations and insights on common diseases.
The company also offers a series of services that include
publishing articles related to the most consulted topics
in each country, providing insurance companies with
statistics on different diseases and developing on-
demand awareness campaigns for UN agencies, public
health institutions, laboratories and NGOs. 1DOC3’s main
strategy is to strengthen its technological development as
AI enables the most efficient allocation of resources. The
company expects to strengthen relations with all clients,
continue growing its user platform and make new alliances
with insurance companies and public health institutions.
It is also working on providing users with quicker answers
in case of an emergency. “The opportunity to impact the
health industry through new technologies and digital
channels is increasingly greater,” says Cardona.
Mexico comprises 1.5 percent of the global e-health revenue and
4.4 percent of the regional
153
Healthcare is a strategic industry for T-Systems, with a
very important market penetration in Europe but with
a low participation in the Mexican market because the
digitalization of the Mexican health sector is slow. However,
we have high growth expectations for it. We are investing
heavily in the sector.
To push and accelerate a change in the digitalization of
the Mexican healthcare system there are two verticals:
one comes from the government through the National
Digital Strategy and the other from the industry itself.
The digitalization of health services is a race against time.
Digitalization is something that is not being questioned,
it either happens or companies will not have a chance of
survival. Regardless of what politicians may say, the world is
already digitally connected. It is imminent and it needs to be
done now, we cannot think of doing it in the coming years.
Q: In terms of human capital, is the country’s workforce
prepared to face the challenges the digital era will bring?
A: Human capital is a critical issue that deserves to be a
top priority. Mexican technicians are extraordinarily good
and competitive worldwide. The fact that we provide
services from Mexico to more than 30 countries means
that our human capital can perform world-class services.
Universities are producing professionals and technicians
with competitive levels. While the technical skills of
graduates are at a good level, an element to improve is the
students’ English level. Especially in the telecoms industry,
people must be able to at least read in English and interact
with clients in English. However, besides this and given the
transformation dynamic of the industry, companies must
invest a lot of money in training, which is understandable
given the characteristics of our business. We invest heavily
in training and certifications. It is a matter of creating a
processes culture, which requires time and effort.
Q: What role does Mexico play in your global strategy?
A: We have been in the Mexican market for over 20 years.
When we first started in the country, we operated under the
name Gedas, providing services to the automotive industry.
Our focus is now on providing services to the premium
segment of companies and public-sector entities.
Mexico has contributed heavily to our global growth. In
2015 and 2016, we grew in revenue on average 30 percent
annually in the country. Repeating this growth in coming
years will be complicated but we expect to continue growing
at an accelerated rate. We have a strong presence in the
industrial sector and we have an important but selective
presence in the public sector. In the health and financial
sectors we have a very small presence. However, we expect
to increase this in both and thus continue growing.
Q: How has digitalization been received in Mexico?
A: Companies are already undergoing the transformation
of the digital revolution but it is a change that needs to
be accelerated in the country. At first, it was hard for
the Mexican business community to understand certain
concepts such as the cloud. However, the cloud is like
the entry ticket to digital transformation. It is impossible
to conceive this transformation without a model such
as the cloud.
Up until a few years ago, companies in Mexico thought that
having control or exclusivity of their technological resources
was of extreme importance since it belonged to their core
business. Today, few companies have their own data center,
since it makes no sense for them to have one. From a cost
perspective for IT, instead of being a fixed-cost model as it
used to be, it has now become a variable cost, which has
viability repercussions, particularly for investment projects.
One of the most common concerns for the business
community regarding the use of the cloud was security.
The truth is that the level of information security
companies can have when using our services versus the
security level they can have in an in-house data center with
limited conditions cannot be compared.
DIGITALIZATION UNDERWAY BUT ACCELERATION NEEDED
FEDERICO CASAS-ALATRISTEManaging Director of T-Systems Mexico
VIEW FROM THE TOP
T-Systems is a global IT Services and Consulting company.
It specializes in providing cloud services, M2M solutions and
communication services, among others, helping companies
construct a digital platform
154
INSIGHT
APPROACHING EARLY CANCER DIAGNOSIS WITH AIJULIÁN RÍOSDirector General of Higia Technologies
Breast cancer mortality is on the rise in Mexico and early
detection can be a strong tool to combat the disease. Self-
examination has traditionally been the first line of defense
but it is far from ideal. After watching his mother survive
two battles with the cancer, 17-year old entrepreneur Julián
Ríos thought artificial intelligence could provide a better
approach and the result of his work is attracting serious
attention both in the public and private spheres.
Ríos’ company, Higia Technologies, produces Eva, a bra
Ríos says can detect breast cancer through the use of
bio-sensory patches. He believes the detection methods
currently available are more for diagnosis, mammography
and biopsy, while there are few effective early detection
processes. Ríos hopes to meet this need with Eva.
The high-tech bra’s bio-patches capture temperature data
that is sent to a mobile app, which keeps a record of the
information received. “Cancer increases blood flow due
to the abnormal production of cells that could produce
a tumor. This leads to an uncommon temperature in the
affected area.” The app’s algorithms analyze the collected
temperature data to produce a thermal conductivity curve
that is compared with a database of 2,000-3,000 curves
of data from women from different parts of the world who
have been diagnosed with cancer. “Different tumors have
different thermic fluids. If there is a curve similar to a case
from the file, the probabilities of having breast cancer are
between 93 and 94 percent,” says Ríos.
Eva will be available early in 2018 in Mexico and Latin
America through online platforms and convenience
stores. The project is awaiting approval from COFEPRIS
and the team recently signed an agreement with IMSS
to carry out trials.
According to the Ministry of Health, in 2015, 6,252 women
died in Mexico due to breast cancer, almost 5 percent
more than the previous year, figures that Ríos wants to
reduce. According to Ríos, a women with cancer in phase
III costs IMSS MX$5 million (US$277,000) every year and
MX$250,000 (US$13,888) if she is in phase I. That is a
high expenditure for the government and a main concern
given the lack of an effective early diagnosis test. “The
government will be one of our main buyers because this
product will help rural clinics, associations, universities,
insurance companies and hospitals reduce costs.” Eva will
initially sell for MX$2,000 (US$111) without government
support, but Ríos says its business model will enable the
company to reduce the price.
Higia Technologies works with a team of 10 people made up
of engineers and oncologists and the company has received
an invitation to work at investor Y Combinator in Silicon
Valley. “It will help us formalize the business part. It receives
7 percent of the company for a very small investment.
However, the real value of this opportunity is to be part of
an ecosystem in which we can gather important contacts
that could lead us to higher investment,” says Ríos.
Ríos began researching breast cancer when he was 13
and locked onto the idea that changes in temperature
could lead to a correct diagnosis. He then gathered his
high-school friends to create Higia Technologies with an
investment of less than US$250. By 2017, the company
had raised US$75,000 from awards and donations,
US$33,000 from investors and it is about to close a round
for US$300,000 from an investment fund. Ríos believes
the Mexican entrepreneurial ecosystem is talented but
lacks support. “Many projects are changing the world
but not in Mexico. The industry of risk analysis is very
small, which restricts investment.” He also thinks many
entrepreneurs in the country have good ideas but poor
execution. “We have often seen how in Mexico ideas are
adjudicated without evaluating whether they can be
executed,” he says.
Higia Technologies is in the process of developing new
products, including a device to detect testicular cancer
through men’s underwear. Ríos says information is the
key component of his company. “Higia Techonologies is
moving from a company that develops medical devices
to an information company. Our value is in the amount of
information we have.”
155
THE CASE FOR STRONGER
DIGITAL SUPPORT
Q: What challenges in digitalization is the healthcare
system faced with?
A: By pushing digitalization you often lose a physical
interaction, which in Mexico and other Latin American
countries makes a huge difference. The visual contact and
dialogue with a physician makes the commercial process
more effective. There was a moment when companies
tried to become more digital, using tools such as iPads as
a mechanism for communicating with the physician, but in
many cases the physician refused to see them. Mexico is a
country where interaction is still important and that presents
a challenge to companies that want to be more innovative.
Many laboratories have reduced the number and size of their
sales teams, which is a trend seen in Big Pharma over the
past 10 years. National laboratories still have larger sales
teams but there are fewer companies with these numbers.
Perhaps, the most important challenge we have in Latin
cultures is making the digital become more human.
Making use of it with the purpose of increasing the quality
and content of our interactions instead of reducing or
eliminating them.
Ten years ago, laboratories enjoyed double-digit growth
rates. Many top labs had a large portfolio for general
practitioners and general medicine and a smaller portfolio
for highly specialized drugs. Over time it has become
impossible to maintain the same growth rates in the primary
care sector, where many national companies are competing
and where generic products are gaining important market
share. Many Big Pharma laboratories are not willing to go
into generics with the same resources. Instead, they venture
into highly specialized areas, where you need to educate
physicians and provide consulting and advice. Training is
now undertaken in many ways not possible before. There
are webcasts and online events in which people interact
across the world, physicians want to have access to more
digital information rather than mountains of paperwork
and commercial representatives are also asking for this.
Laboratories are implementing digital ways of reaching
them while keeping human interaction alive. For example,
speaking tours that used to be only in-person experiences
are now web events that become physical when the expert
reaches the participant’s city.
Technology has developed greatly and has decreased direct
sales to producers but they have strengthened innovative
tools that allow for better follow-up with an increased
chance of achieving a drug’s purpose.
Q: What are the main challenges regarding cybersecurity
in healthcare?
A: Deloitte has a department specialized in cybersecurity
although this branch has not yet developed much at
an industrial level in Mexico. Cybersecurity allows the
verification of information veracity and a better follow-up
on patient health and on a drug’s effectiveness. Companies
have not yet reached the point where they feel they need
cybersecurity for health-related issues. They focus more
on financial issues and economic risks, where there is
tangible and confidential information management. Health
companies in Mexico have not placed as much importance
on cybersecurity concerning drugs or services as they have
on information management and patient communication.
Q: How can you use data analytics to track and eliminate
epidemic viruses in Mexico?
A: There are technological support tools available during
epidemic periods but they are uncommon because the
difficult epidemics are usually centered in low-income
communities, which have less access to technology.
For segments of our population with access to electronic
media, advanced analytics that are available today would
allow a web search and would become a predictor of possible
diseases depending on the nature of the questions and
information searched. This constitutes a great opportunity
in prevention, an area in which we have a long way to go.
Horacio Peña Senior Manager in Strategy and
Operations Consulting at Deloitte
Xavier Ordoñez Partner in Strategy and Operations Consulting at Deloitte
VIEW FROM THE TOP
Deloitte is one of the world’s leading audit, consulting,
tax, financial advisory and risk advisory brands, with about
245,000 people at member firms in 150 countries and
territories
157
For years, many have spoken of Mexico’s clinical research industry as a boom
waiting to happen. The country has an ideal geography, ethnical diversity and the
sanitary installations, but it still only accounts for an insignificant proportion of the
number of clinical trials carried out worldwide, at just over 1 percent, according
to clinicaltrials.gov. Its northern neighbor has a hefty 42 percent of global trials,
despite the US being more costly. According to ProMéxico, conducting clinical
trials in Mexico is 46.2 percent cheaper than in the US. Most of the testing
performed here is retesting, as required by local sanitary regulations. Authorized
third parties have helped enormously in this area, speeding up processes and
efficiency. According to a COFEPRIS 2014 press release, authorized third parties
had reduced authorization wait times from an average of two years to 20
business days.
Clinical research is vital worldwide for drug companies, regulatory bodies and
consumers alike. Mexico has all the attributes to become a hub for research in the
Americas. This chapter will present interviews with the labs and contract research
organizations that undertake the research and will examine the obstacles and
opportunities for Mexico to attract more investment in this area.
CLINICAL RESEARCH & TESTING
7
www.mexicobusinessevents.com
Mexico Business Events organizes high-level conferences
where business and political leaders meet to discuss the
key topics that are defining Mexico’s economic future. By
connecting each industry’s key stakeholders, our events
are accelerating the exchange of vital industry information
that is crucial to capitalize on Mexico’s economic potential,
and create new business opportunities in an unparalleled
networking environment.
Mexico Business Events organizes high-
level conferences where business and
political leaders meet to discuss the key
topics that are defining Mexico’s economic
future. By connecting each industry’s key
stakeholders, our events are accelerating
the exchange of vital industry information
that is crucial to capitalize on Mexico’s
economic potential and create new
business opportunities in an unparalleled
networking environment.
CAN YOU AFFORD TO MISS OUT?Register Now for Coming Events
www.mexicobusinessevents.com
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159
CHAPTER 7: CLINICAL RESEARCH & TESTING
160 ANALYSIS: Demographics Among Keys to Clinical Research Success
162 VIEW FROM THE TOP: Arturo Rodríguez, Infinite Clinical Research and ACROM
164 INSIGHT: Israel Vega, PRA Health Sciences
165 VIEW FROM THE TOP: Ciro García, Accelerium Clinical Research
166 VIEW FROM THE TOP: Cecilia Moreno, PPD
José Viramontes, PPD
167 INSIGHT: Annette Ortiz, Epic CRO
168 VIEW FROM THE TOP: Melissa Rosales, RM Pharma
169 VIEW FROM THE TOP: Karen Hahn, ICON
170 VIEW FROM THE TOP: Héctor Ávila, Cecyc Pharma
Mezly Rodríguez, Cecyc Pharma
Diego Ávila, Cecyc Pharma
172 VIEW FROM THE TOP: Abel Hernández, ANCE
Yoloxóchitl Macías, ANCE
173 VIEW FROM THE TOP: Carlos Pérez, NYCE
174 VIEW FROM THE TOP: Sonia Pérez, UDIBI
175 VIEW FROM THE TOP: Andrés Ferrara, Analitek
176 ANALYSIS: Authorized Third Parties Ease Registration Backlog
177 ROUNDTABLE: What Must Mexico do to Become a Clinical Research Hub?
160
DEMOGRAPHICS AMONG KEYS TO CLINICAL RESEARCH SUCCESS
With its diverse demographic profile, a vast pool of
potential volunteers and widely recognized regulatory
arm that is bent on speeding up processes, Mexico
has all the ingredients to become a hub for global
clinical research and drug testing. Despite its numerous
advantages, the country remains on the outside looking
in. It carries out just 1 percent of global clinical trials,
about 2,850, according to clinicaltrials.gov.
To move Mexico up the ladder, the government is working
with regulators and industry associations to promote
improved protocols, speed up processes and boost
recognition of the country’s strong attributes, including
a skilled but economical labor pool, to attract investment
and help establish itself among the sector’s elite hubs.
While there remains a long way to go, the establishment
of a framework agreement in 2017 to promote clinical
research and the clear emergence of authorized third
parties, established in 2014 and now coming into their
own, has created an air of optimism.
“The creation of the authorized third-party system was a
great decision. The fact that the government accepted that its
internal structure could not deal with the volume of demand
was a good move,” says Carlos Pérez, Director General of
NYCE, an authorized third party that works across sectors.
Mexico already has a foothold, standing
with the leaders in health sector R&D
among the countries participating in KPMG’s
Competitiveness Alternative 2016 Study.
In clinical research, it is strongest on T2D,
landing the top spot on the KMR Group Index and among
the top three for arthritis.
According to a report by Zion Market Research, the CRO
market was worth US$34 billion in 2014 and is expected
to be valued at US$59 billion in 2020. Pharmaceutical
manufacturing companies in emerging countries in Asia-
Pacific, Latin America and Eastern Europe are responsible
for most of the outsourcing activities due to the large
population of treatment-naive patients, low labor and
manufacturing costs and a skilled medical workforce, the
report states.
PATIENT RECRUITMENT OPPORTUNITIES
Mexico has a diverse population of 121 million inhabitants
and has more than 10 cities with over 10 million
inhabitants, providing a large pool for recruitment. “The
big international pharma companies have demonstrated
their interest in the available patient pool, which offers a
substantial opportunity to accelerate their research,” says
Francisco Corpi, Latin North Regional Director of Elsevier.
To take advantage of this favorable demographic, President
Peña Nieto signed a collaboration agreement in January
2017 with COFEPRIS, SAT, CANIFARMA, IMSS, ANAFAM
and AMIIF to promote the development of protocols for
health research, opening the door to new opportunities
for the industry. According to the Ministry of Health, this
agreement will make the most of the potential available
of more than 83,000 doctors, 459 researches, 155 nurses,
1,786 medical units and about 62 million IMSS members
and 487,000 registered with ISSSTE.
According to Corpi, the possibility of finding volunteers
in Mexico has been considered a key factor for bringing
clinical research to the country, although, he believes there
is a concern from regulatory agencies and policymakers
regarding the safety of patients. “While both Big Pharma
corporations and policymakers here in Mexico are still
figuring out the most adequate formula for success, we
see many clinical trial opportunities lost to other countries
in the region. The challenge is not just the bureaucracy of
policy but it is even at the infrastructure, personnel and
information level,” Corpi adds.
ANALYSIS
Mexico is trying to scale up its clinical research by taking
advantage of its natural traits: a large and diverse population,
supportive regulatory authorities and competitive
operational costs
R&D services- International results (US=100.0)
0
20
40
60
80
100
Mex
ico
Can
ada
Net
herl
and
s
Fra
nce
Aus
tral
ia
Ital
y
Ger
man
y
Jap
anUK
US
88.1 87.2 8479 77.9 77.6
74 72.3
55.3
THE COST OF R&D SERVICES COMPARED TO THE US (US=100.0)
Source: KPMG
161
EASING APPROVAL TIMES
In May 2017, Julio Sanchez y Tépoz said during a forum
with AMIIF that COFEPRIS is working very closely with the
industry to create incentives for investment. New research
protocols allow product approvals within 45 days, making
the sector more competitive. José Viramontes, Director
of Remote Site Management and Monitoring of PPD,
said 2016 was an excellent year for Mexico in terms of
clinical research since regulation became more consistent
with the company’s internal processes. “The year closed
with a meeting between the authorities and associations
during which a few changes to the law were proposed.
For example, Mexican law requires the involvement of
three committees: ethics, research and biosafety. One
proposal seeks to include only one committee, which is
an approach comparable to the rest of the world. Another
consideration is to run processes in parallel rather than
sequentially, which can help shorten approval times.” He
added that the purpose of these changes was to support
industry efforts to bend both costs and the time required
for drug development.
Authorized third parties, companies certified by
COFEPRIS to support authorities with sanitary control
and vigilance, have also played a significant role in
speeding up approval times. There are 122 authorized
testing laboratories, 62 units of interchangeability and
bio-comparability and 26 verification units. “We have
authorized a series of third parties to be much faster in
clinical authorizations, which will allow Mexico to become
a center of clinical research,” said Rafael Gual, Director
General of CANIFARMA.
STRATEGIC LOCATION
It helps to have the world leader in clinical research as
a next-door neighbor. The US conducts about 103,000
studies, says data from clinicaltrials.gov. According
to ProMéxico, the Mexican population suffers chronic
conditions similar to those of Americans, which helps
conduct studies.
For these reasons, among others, Mexico could become
a reference for the evaluation of biosimilars worldwide
due to its geographical location and the fact that many
countries are seeking to access other markets, says Sonia
Pérez, Executive Director of UDIBI. “The knowledge we
gather when we perform a detailed evaluation might
be useful in developing innovative molecules. Mexico
has great potential but our innovation system is not
articulated,” says Pérez. Similarly, Ciro García, Director
General of Accelerium Clinical Research, believes
conducting early phase clinical research could result in
significant opportunities for Mexico, although there are
constrains that are impeding the arrival of these types of
studies. “There are not many international phase I studies
brought to Mexico, in part because the research process
requires higher quality standards and a higher degree of
sophistication and organization,” García says.
INDUSTRY TRENDS
While overcoming obstacles, the country must also keep
up with prevailing trends such as biotechnology, an area
that has captured the attention of many industry players.
According to ProMéxico, there are 406 companies in
Mexico that develop or use modern biotechnology
and 33 percent of those operate in the health industry.
“It used to be that only 20 percent of diseases were
healed with biotechnology, but now pharmaceutical
companies want to treat other diseases like diabetes and
cardiovascular with these types of drugs,” says Annette
Ortíz, Director General of Epic CRO. The main benefits of
this technology are personalized treatments, reduction
of adverse effects and higher control of the disease
for both patient and physician, she adds. Nevertheless,
companies are concerned that although the new
pharmacovigilance standard developed by COFEPRIS
controls the chemical medicine, it does not respond to
the need for biotechnology.
Another industry trend is the need for e-services to
manage information that can be used for preventive
medicine or the development of biotechnological drugs.
As mentioned by Carlos Oviedo, Director General of
Grupo Diagnóstico Aries (GDA), Big Data applications
should translate into timely disease prevention. “In this
area, we would like to cooperate with local governments
and companies by sharing all the information we gather
to increase prevention. The Ministry of Health is the
appropriate entity to use this information for the benefit
of Mexican citizens,” he says.
Mexico’s attributes demonstrate it has great potential to
develop research. Some companies, such as Sanofi have
already taken advantage of the local opportunities. The
leading pharmaceutical company has 35 active studies in
Mexico, making it the second-most important clinical research
unit after India for Sanofi’s emerging economies markets.
The global contract research organization market is expected to reach a value of US$59 billion by 2020
162
back into the country because that amounts to importing
tissue. Covering all these elements under one umbrella would
increase security, productivity and reduce response times.
Q: Regarding pediatric care, in which main therapeutic areas
are you concentrating research?
A: In pediatrics, our studies are mostly in vaccines and
developmental or growth conditions that require growth
hormones. The challenges we face are that the researcher’s
profile must be much more focused on the therapeutic
area involved, while patients are seen in more specialized
institutions and finally there is not much availability of these
medicines. Also, children are under the protection of their
parents and, because babies and children are fragile, parents
do not allow them to participate in research protocols. Our
main strategy to convince parents is to explain the benefits
of the medicine for the patient. The most important point
is to be clear and open, explain that trials are not black and
white and highlight the possible downsides in addition to
the opportunities. This can make a difference in a patient
participating or not.
Q: What are the advantages of performing clinical research
in Mexico over other Latin American countries?
A: Mexico has long wait times but not as long as other Latin
American countries. In Mexico, in line with FDA rules, if an
efficient rescue medicine is available, trials can be held with
groups taking placebos. This is not the case in some Latin
American countries. The Helsinki Declaration states that a
placebo should not be given to patients but that a drug
should always be compared to what is available on the
market. The downside of this is that researchers will not know
the base state of the patient or the efficacy of the product.
Researchers will know the percentage of how efficient it is
compared to the available treatment but that treatment itself
is not 100 percent effective, therefore you may be getting a
false positive: believing the product works well but in reality,
providing a lesser level of efficacy than that needed by the
population. There are cases such as CNS, cancer or high-risk
diseases in which it is not possible to give placebos because
the patient’s treatment would be unbalanced and their lives
would be put in danger.
Q: How is Infinite Clinical Research (ICR) fulfilling its mission
to be an outsourcing leader in the pharmaceutical industry?
A: To meet an objective it is necessary to understand the main
requirements of the industry, including regulation. We are
continually attentive to possible changes or lines that could
be worked on to achieve these updates and improvements.
We do this by participating in all the regulatory events held
by COFEPRIS and the National Commission of Bioethics
and International Commerce in combination with our day-
to-day experience in working with the authorities. Any alert is
immediately communicated to our clients and we implement
it in our processes. Through a corrective and preventive
action plan we remodel our activities and strive to always
be at the vanguard of what is happening. With the advantage
of working hand in hand with ACROM, which participates
directly in the revision and elaboration of process guides,
we are ready when new laws come into force.
Q: What particular regulation is ICR lobbying to establish
or change?
A: It is not that we want to change a point but we want
to homogenize regulation and see what processes can
be carried out simultaneously. When a research center
or country is chosen, companies look at the time elapsed
between sending in the first documents and recruiting the
first patient. This is what has left Mexico out of the market
because we have time frames of over 300 days. Sometimes
this is due to the authorities, sometimes ethics committees
while other times it could be due to internal processes. The
internal processes element is what we need to optimize
because we realized that many days are added to processing
times due to internal delays. Running things simultaneously
will allow us to reduce this.
We are also working with the Ministry of Foreign Affairs to
achieve greater flexibility for products brought in and out
of the country. At the moment, medicine is brought in on
exceptions but it then becomes a struggle to import any
supplementary products. We are asking to be able to bring
everything in together through the approval service rather
than taking out licenses for each one. Samples taken for
analysis are another issue because they cannot be brought
LEADING THE CLINICAL RESEARCH CHARGEARTURO RODRÍGUEZDirector General of ICR and President of ACROM
VIEW FROM THE TOP
163
Another advantage is that doctors here are closer to the
information available in the US and are more up to date
on what is needed. They are also better informed about
new medicines and can thus achieve better results. Central
and South America often receive more medicine from
Europe, which is closer in terms of flying hours. The work
methodology in Europe is different. They work with less time
pressure than in the US, which gives them the ability to work
with Central and South America’s processing times.
Mexico’s main obstacle was that it did not have access to
public hospitals, whereas in 2016 and 2017 an agreement
was reached with IMSS and COFEPRIS to open the doors
to clinical research. The same will happen with ISSSTE and
other public institutions. This dramatically increases our
chances of recruiting patients. In 2016, 80 percent of trials
were carried out in private institutions. We hope to attract
more trials to Mexico, maintaining the amount carried out
in the private sector but increasing the amount in the public
sector to achieve a 50/50 balance.
Q: COFEPRIS Comissioner Julio Sánchez y Tépoz told MHR
he hopes to triple investment in clinical research in Mexico
in two years. Is that possible?
A: I agree with his actions. We are working hand in hand with
COFEPRIS. One of the problems seen in Mexico was the lack
of certitude. For example, when Mexico first implemented
certifications, operations and processing times were
forgotten and they multiplied, which caused clinical research
to move away from Mexico. Before this, the number of trials
entering Mexico was extremely high. The commissioner’s
vision is progressive because he is looking at facilitating the
arrival of trials and not at implementing obstacles, which
gives us a great opportunity to support him.
In addition, the links between Mexico City and the other
states allow fluid communication. To get to Monterrey takes
the same amount of time as getting to the south of Mexico
City. By going to other states, clinical research is spread
throughout Mexico and capacity is increased although
41.4%
7.1% 6.9% 6.4% 5.5%2.3% 1.1% 0.9% 0.5% 0.4%
0
5
10
15
20
25
30
35
40
45
OtherColombia ChileArgentinaMexicoBrazil ChinaUKGermanyCanada FranceUS
4.0%
23.5%
CLINICAL TRIALS CARRIED OUT IN JUNE 2017 (percentage of global trials)
Source: www.clinicaltrials.gov
around 60 percent of research takes place in the capital.
The following two states are Nuevo Leon and Jalisco and
others such as Durango and Chihuahua are beginning to
develop their centers and facilities. Mexico has several types
of climate: forest, dessert and tropical, which enables the
research of tropical and rare diseases, further boosted by
our large population and our urban/rural split.
Q: ACROM is still a young association. What have been
its greatest challenges and how has it approached its
relationship with the authorities?
A: The first challenge was to create ACROM as it involved
bringing together companies that were competitors.
Finally, the alliance was created and we worked on
creating respect between the partners as what benefits
one will benefit the other. The hardest challenge has been
credibility, having both the industry and the authorities
believe in us. We are trying to work with CETIFARMA
to certify companies as ethically responsible, which
complements the credibility of the association in front
of the authorities and the industry. We are interested in
them seeing we have no issues in covering ethical issues.
Q: What will your priorities for 2017 be in ICR and in
ACROM?
A: ICR has been working hard on developing
pharmacovigilance and risk management. One of the points
of new norms, a global movement, is the need to create
risk management plans. We require much more specialized
people than other CROs, this is an opportunity to develop.
The vision of ACROM is to promote that Mexico has
credibility, opportunity and could move from being an
emerging zone to a country of primary decisions.
Infinite Clinical Research (ICR) is a Mexican CRO that has
15 years of experience in clinical trials in Mexico and in Latin
America. ACROM is the Mexican association of CROs, which
promotes quality in clinical R&D in Mexico
164
INSIGHT
PROCESSING TIMES SLOWING MEXICO DOWNISRAEL VEGAClinical Operational Manager of PRA Health Sciences
The paradigm is set: Mexico has the correct infrastructure
in place, an ideal mix of ethnicities and research talent
and a privileged location close to the US and relatively
easy to reach from Europe, but despite the hopes
expressed by industry insiders in previous Mexico Health
Review editions, the percentage of global clinical trials
carried out in Mexico is decreasing rather than increasing,
according to clinicaltrials.gov.
However, the sentiment in the industry remains optimistic
and Israel Vega, Clinical Operational Manager of PRA Health
Sciences, believes that the trend will pick up. “We should
have more than 1 percent of trials. We are close to the US,
so we could act as a hub for processes that
are currently being done in Panama,” he says.
PRA Health Sciences is a US-based CRO with
41 years of expertise in clinical research, phase
I-IIa, phase II-III, post-approval, safety and risk
management, biosimilars, rare diseases and
oncology. It operates in over 80 countries and
is one of the largest CROs in the world.
According to clinicaltrials.gov, Mexico performs only 1 percent
of global clinical trials, whereas the US carries out 42 percent
and Brazil 2 percent. Asia performs 15.4 percent compared to
5.5 percent in Central and South America and the Caribbean.
“Mexico usually does very little phase I testing, that is done
elsewhere. We concentrate on phase II and phase III,” says
Vega. He explains that despite faster timelines in Mexico
over the past few years, there is yet work to be done.
“Although timelines have been improved, it still takes us
six to seven months from receiving the protocol to begin
enrolling subjects in the first site. In the US, this can be done
in two to three weeks. In Guatemala or Panama, it can be
started in three to four months,” Vega says.
It is not just the timelines, Vega adds, it is the system.
Brazil, for example, remains an attractive destination
because although it takes 11 to 13 months to set up a
trial, due to the health system working differently it is
possible to enroll 100 subjects in just one day. “That’s
something we cannot compete against.”
The Mexican government is stepping up its efforts to attract
further clinical trials. In addition to speeding up processing
times to become more attractive against other countries.
In December 2016 the IMSS modified its terms and
conditions for conducting clinical trials, which has sparked
widespread interest among the private sector as the IMSS’
large population of beneficiaries is an ideal patient base for
carrying out sponsored clinical trials. IMSS, the country’s
largest health institute, reports that as of May 31, 2017, it
had 19.04 million affiliated workers. “Over
the past year the agreements we have with
public institutions have changed: we are
now able to work with IMSS,” Vega says.
He explains that the CRO will work
through the department of research at
IMSS, contacting researchers centrally.
Researchers will not be able to carry out
more than two active studies at a time.
IMSS clinical trials will mostly focus on treating the
conditions that weigh down a large proportion of the
population and thus the institute, such as diabetes,
cardiovascular diseases and cancer. “They also have the
potential to conduct rare disease trials,” Vega adds. “I
think that starting to work with IMSS in 2017 will be a
big boost to the sector. We will get a lot of patients and
quick results. If we focus on not losing quality, then it
could be the first step toward opening up the market.”
He adds that the industry has seen increased interest
in Mexico from Big Pharma and that negotiations have
already begun to conduct clinical trials with ISSSTE.
Vega also does not believe that the general economic
fluctuations of 2016/2017 will keep the industry down. “Peso
depreciation will probably not impact the attractiveness
of Mexico as a destination for clinical trials because most
budgets are still negotiated in US dollars,” says Vega.
1.1%the proportion
of global clinical trials
Mexico performs
165
jettisoned even faster. Any failure of this process may
represent potential losses for pharmaceutical sponsors.
We are trying to attract early phase studies to our state-of-
the-art phase I unit and show that Mexico is now capable of
delivering results comparable in quality with the other phase
I units in the world. In fact, we are pioneers in conducting
international phase I trials in complex therapeutic areas
such as oncology. We are one of the few centers in Mexico
that has the infrastructure and organization to hold phase
I or first-in-human studies sponsored by the international
industry. One of our strategies is to bring more phase I
trials to Mexico. We have been moving forward and we are
now working with multinational CROs to create enough
confidence to bring this process to the country.
Q: What system do you use to protect patient information?
A: We have designated restricted areas with high-security
digital access controls to protect physical records and
any patient-related information. Each system requires
a validation to store the patient data. We comply with
the Code of Federal Regulations Title 21 for electronic
information, which requires us to use a validated system
that meets those regulations. We must understand that
research is not something random. It requires attention
and consideration of local and international regulations.
Q: What results did you see in 2016 and what are your
plans for 2017?
A: 2016 was an important year for Accelerium. We saw
significant growth in the number of projects we worked on
across therapeutic areas. We recently started operating
our second phase II – IV research center south of the
state of Nuevo Leon. We plan to focus on leveraging
technology to enhance the productivity and efficiency of
our operations, while overall helping the industry increase
access to larger patient populations.
Q: Given the speed of innovation across sectors, what is
the state of clinical research today?
A: There is a new trend in biotech drugs and personalized
medicine. Biotechnology has made it possible to create
therapies focused on specific mutations or biomarkers. In
addition, it is also now common to evaluate participant
genotypes in clinical trials because drugs have different
interactions depending on genetics. A drug dosage that
works well for the Asian population might have different
results for Latin Americans. The trend is to understand the
effect of a drug among different groups.
Q: What is Accelerium Clinical Research doing in line
with this trend?
A: As we increase our work in more complex clinical
trials, we are able to assume the level of sophistication
demanded by the industry. The international requirements
for conducting clinical trials are becoming increasingly
stringent. Consequently, we have had to enhance our
own infrastructure and organization to stay in line with
these trends. Previously, clinical research could have
been easily performed in a small doctor’s office with
basic equipment. To keep up with quality and safety,
regulators now require more complex infrastructure
and controls. The new generation of drugs is inherently
more complex, warranting more thorough studies and
increasingly stringent procedures.
Q: To what extent is it possible to start developing phase
I research in Mexico instead of focusing on solely phases
II and IV?
A: Early phase clinical research is another important area
of opportunity in Mexico. There are not many international
phase I studies brought to Mexico, in part because the
research process requires higher quality standards and
a higher degree of sophistication and organization. The
strategic and tactical work done in phase I has a greater
impact on downstream phase II and phase III costs than
any other factor, and has the greatest impact on drug
development success. This is a critical point in the research
process. Drugs that should go forward need to move ahead
quickly and drugs that should be abandoned should be
MOVING BEYOND THE BASICS OF CLINICAL RESEARCH
CIRO GARCÍADirector General of Accelerium Clinical Research
VIEW FROM THE TOP
Accelerium is a Monterrey-based research center dedicated
to the pharmaceutical and biotechnological industries. It
operates trials from phase II to phase IV and aims to contribute
to scientific research and development in Mexico
166
EXPANDING TO REACH PUBLIC AND PRIVATE ENTITIES
Q: In 2016, you told MHR you had plans to open more centers
in Mexico. To what extent have you fulfilled these plans?
CM: We are opening an increasing number of centers in
Mexico to work with the private and public sectors and in
new therapeutic areas, such as vaccines. Additionally, IMSS
is modifying its internal processes to allow more interaction
with pharmaceutical companies and has changed its
contract template to better support the industry. We
already have started working with the agency in oncology,
allowing patients with less prevalent diseases to be enrolled
in clinical trials. We are also working with IMSS on vaccines
for infectious diseases.
Q: What are the specific challenges in working with
vaccines?
CM: One of the main challenges of working with vaccines is
the number of patients who have to be recruited. Studies can
include hundreds or thousands of patients, so centers have to
have the necessary infrastructure and personnel to support
those needs. Also, vaccines are often for endemic diseases,
many of which are tropical like zika and dengue and occur in
Mexico, so there is an area of opportunity for these studies.
JV: Another challenge is finding healthy volunteers and
conducting the follow-up to ensure the vaccine is effective.
The informed consent applied to healthy volunteers is
different than that used to invite patients who are conscious
of their disease. An additional factor to be considered is that
in many cases vaccine clinical trials include children.
Q: What impact has NOM-220 had on your Mexican
operations and what changes do you expect from future
modifications?
CM: We have not seen much impact but we are waiting to
see what new follow-up activities result from the vigilance
plans. The reporting of adverse events in clinical trials
is still very similar to what it was before. Also, we will
probably participate in more risk-management studies
or observational studies going forward.
JV: Although the section of the NOM that deals with
the reporting of adverse events in clinical trials has seen
a few slight modifications, it has not had a substantial
impact. It has more of an impact on the spontaneous
adverse events for medicine already commercially
available. Most of the industry is working on how to
implement these changes in their internal processes.
There is a Mexican association of pharmacovigilance that
holds regular meetings in which the details of the new NOM
are discussed. They are in contact with the authorities.
Q: Looking to the future, what are PPD’s goals for
Mexico?
CM: Our goal is to continue growing. National regulation
has been beneficial to our industry and over the past few
years we have seen an improvement in approval times and
greater willingness to strengthen and improve regulatory
processes, which has made Mexico more competitive
when compared to the rest of the world. COFEPRIS
continues to improve its processing time frames and
research sites continue to operate at increasingly higher
standards, which improves overall recruitment times.
JV: 2016 was an excellent year for Mexico in many ways.
The regulatory authorities have brought much greater
consistency to their internal processes and they have
greatly expanded their interactions with companies.
The year closed with a meeting between the authorities
and associations, during which a few changes to the
law were proposed. For example, Mexican law requires
the involvement of three committees: ethics, research
and biosafety. One proposal seeks to include only one
committee, which is an approach comparable to the rest
of the world. Another consideration is to run processes in
parallel rather than sequentially, which can help shorten
approval times. The purpose of these changes is to
support the industry’s ongoing efforts to curb the cost
and time curve of drug development.
José ViramontesDirector of Remote Site
Management & Monitoring of PPD
Cecilia MorenoAssociate Director of Clinical Management of PPD
VIEW FROM THE TOP
PPD is a US-based contract research organization present
in 47 countries and working in early development, clinical
development, post-approval studies and consulting, among
other areas. It has been present in Mexico since 1998
167
INSIGHT
The development of a biotechnology drug industry is
setting up a panorama of innovation in the country that
could provide personalized treatments and better disease
management. However, without strict data collection and
regulation, patient health could be endangered.
“It is not easy,” says Annette Ortiz, Director General of Epic
CRO. Companies like Epic CRO are offering clinical research
solutions to anticipate the changing terrain. The company,
which works in pharmaceuticals, nutrition and medical
devices is also highly interested in the biotech industry and
in acquiring clients that want to start clinical trials for drugs
with a biological basis.
Epic CRO has 10 years of experience conducting clinical
trials in Latin America, providing integral and tailored
services to local and foreign clients looking for clinical
development to take their products to market.
“It used to be that 20 percent of diseases were healed
with special chemistry, known as biotechnology, but now
pharmaceutical companies want to treat other diseases like
diabetes and cardiovascular with these types of drugs,”
Ortiz says. The main benefits of this technology are
personalized treatments, reduction of adverse effects and
higher control of the disease for both patient and physician.
Epic CRO clinical research focuses on vaccines, diabetes,
respiratory and gastric disease medication. The company
has developed trials for influenza and hepatitis C vaccines,
in addition to a formula for chromate testing to detect
lymphatic cancer. However, Ortiz recognizes this traditional
clinical research process completely changes when dealing
with biotechnological drugs. “Data collection becomes a
new challenge when we need to consider more factors
because any patient behavior can vary the molecule’s
effects. During regular clinical trials we have two patient
groups to observe, now we have to control every patient
separately,” she says.
Given the complexity of the trials and their cost,
pharmacovigilance and techno-vigilance become a main
concern for clients. As a solution, Epic CRO has a two-
server protection system.
A large obstacle for this industry is the lack of regulation.
Ortiz says that COFEPRIS was expected to prepare
regulation on this subject for 2016. However, “companies
that were supposed to start clinical research realized
COFEPRIS was not yet ready to answer many of the
questions they had.” She says that there is a big difference
between traditional pharmacy and biotechnology, which
requires an understanding and new technology that is not
common in the Mexican pharmaceutical context.
Ortiz believes it will take at least one more year to complete
the regulation. Meanwhile, the company’s plan is to
gain as much knowledge as they can from each of their
biotechnology trials and get a full understanding of how
each molecule works to sharpen each protocol, so when the
time comes they will be prepared to explain to patients the
benefits of this new technology.
Epic CRO's priority is to push the industry to do clinical
research. “The challenge I find is that Mexican companies
want to bring products onto the market as fast as they
can so they try to take shortcuts to get approvals,” she
says. CROs could help prevent this issue by analyzing the
studies before they are performed and suggest potential
modifications in case a more complete trial is required.
This could be an issue for local companies. Epic CRO has
done clinical development for companies from Spain and
the US that want to enter Mexico and are taking the right
steps to perform trials for their products here. “Mexico
is one of the countries in Latin America that is trying to
speed the authorization process without cutting steps and
reviews” although international companies are more open
to these requirements.
“Biotechnology represents a strong commitment for us.
What we are doing in research right now will show results in
10 years and all the data you are accumulating will probably
save lives,” Ortiz concludes.
INNOVATION BLAZES TRAIL TOWARD PERSONALIZED
TREATMENTSANNETTE ORTIZ
Director General of Epic CRO
168
the profiles to see who has the best potential for the study
and we call them. We also advertise in newspapers and
we hold talks with first-contact doctors to provide them
with information on new molecules and to see if they are
interested in participating or in referring patients. For
pediatric studies, most of the recruitment is achieved by
referral from specialists so we distribute brochures among
pediatric associations, explaining the type of conditions
we are looking for. It is hard to find the ideal patient for
every study, which is why we have to work every day to
expand our database.
Today, inclusion criteria is increasingly complicated,
so when we need samples of 10 patients with certain
characteristics, we need to contact at least 300 patients
from our database because there will be criteria most
of them do not meet. However, we always keep those
patients in the database and continue to perform follow-
ups because we know that at some point they may be
the patients we need for a study.
Q: What added value does RM Pharma bring to the health
industry over other companies?
A: Based on our client feedback, one of our values is the high
quality of data we provide to the industry, rapid recruitment
and our high rates of patient retention in studies, which is
around 93 percent. Some of our studies have lasted four
years and the patients are still participating. This is achieved
through the quality of the medical service we provide and
the experience of our doctors.
Q: What are your goals for 2017 and how will you reach them?
A: Our goal is to start providing more CRO services, such
as monitoring of clinical studies, capturing electronic
databases and protocol reporting. We will start reaching
out to national labs that require more local studies,
especially with the new pharmacovigilance norm. We
have plans to open operations in Queretaro next year, a
region that is growing rapidly due to the automotive and
aerospace industries and we know there will be a need for
more studies because national and international hospitals
are settling there.
Q: What advances has RM Pharma made in its operations
over the past year?
A: Our main achievement over the last year was the
establishment of an alliance with Bio Clinica, an American
company, which enabled us to be part of a global network
of research sites focused on making clinical trials a success
and to diversify our activities in different therapeutic areas.
This year, we will launch a protocol for dyslipidemia that
could help prevent heart attacks, based on a new model
to reach a large number of participating patients. We are
also starting to work with children for a local allergic rhinitis
study and with an international study on pediatric psoriasis.
Q: How has the new pharmacovigilance NOM impacted
RM Pharma?
A: We are focused on pharmacovigilance follow-ups and we
report side-effects and serious adverse events and submit
real-time reports. We provide training to our doctoral staff
on the norm’s updates so they can be aware of patient
progress and report any changes to COFEPRIS.
However, we will need at least another year to completely
integrate the norm, because we have to invest more in
educating patients so they know there is a line they can
call if they have an unusual reaction and we need to train
first-contact doctors and laboratory staff to register all the
important data when patients call.
Q: What strategy does RM Pharma employ to recruit
volunteers and how difficult is it to find the ideal patient
for studies?
A: Our database grows mainly through references from
existing patients. To keep them engaged we provide free
check-ups. A specialist evaluates them and creates a
patient profile, so when we start a new protocol we check
SUCCESSFUL RECRUITMENT FOR MORE SPECIALIZED STUDIESMELISSA ROSALESDirector General of RM Pharma
VIEW FROM THE TOP
RM Pharma is a Mexico City based CRO that performs
clinical research in the fields of rheumatology, cardiology,
nutrition, pediatrics, endocrinology, otorhinolaryngology
and ophthalmology
169
Q: What has shaped ICON’s evolution over the past year?
A: It has been a successful year for the company. We
received recognition for the second time as the Best CRO
at the Vaccine Industry Excellence Awards. Last year, we
invested a lot in recruiting the best professionals and
in having a bigger footprint for our private and public
customers through our Vaccine Center of Excellence.
Through this center, we lead research on vaccines for
infectious diseases and global pandemics. We also
received the Outstanding Partner Award from Amgen for
a Functional Service Provider partnership we established
a year ago for global project management.
Q: What is Mexico’s role in ICON’s global operations?
A: In Mexico, which is ICON’s biggest office in Latin
America, followed by Brazil and Argentina, we employ
211 people and have high growth expectations. However,
while Mexico and Latin America have a lot to offer, they
lack exposure. The region represents just 6 percent of
the global clinical research market, as attention is usually
given to the US, Europe and Asia, but we are investing
in strategies and working with associations such as
ACROM, AMIIF and the Association of Clinical Research
Professionals (APEIC) to make us more visible to the
rest of the world. Fortunately, the new administration
in COFEPRIS is maintaining continuity, bringing in new
and good ideas and they are studying models from other
countries’ regulatory organisms to see what could be
useful for Mexico.
Q: What is Mexico’s value proposition as a potential
clinical research hub for international companies?
A: The IMSS now allows clinical studies, which will provide
great opportunities for the sector. The institution has a
huge patient population and is also a good source of
patients with rare diseases that are hard to find in other
institutions. In addition, Mexico has a lot of potential
in pediatric clinical studies due to the large population
of children and the good relationship between doctors
and parents we have identified in previous recruitments.
Therefore, ICON has already developed expertise in
pediatric studies.
EXPOSURE NEEDED TO MAKE MEXICO A RESEARCH HUB
KAREN HAHNDirector of Clinical Trial Management for ICON
VIEW FROM THE TOP
Q: What techniques can be applied to increase patient
recruitment and take advantage of the possibilities offered
by the Mexican population?
A: We have a close relationship with patient-recruitment
sites and provide quality training to professionals so they can
understand their target population. We perform a close follow-
up and we ensure we choose the right sites through a site
selection system. There are many recruitment opportunities
across the country, so we are expanding to reach a population
we could work with and which is not receiving treatment.
Q: Many people do not know the benefits of receiving
treatment through a clinical study. How are you taking this
message to more patients?
A: We are designing a campaign with ACROM to explain the
benefits of clinical research to patients. A few years ago, we
did this for doctors who were not aware of the benefits of
working in clinical research. ACROM also approaches many
patient associations to inform them about the research we
want to conduct. The effort to recruit patients is shared
among all players in the sector.
Q: Where is technology development oriented at ICON?
A: ICON is committed to developing technology for monitoring
based on risk. Our goal is to reach real-time analysis of what is
going on in each site, so we do not have to wait till the end of
the study to discover there were problems in measurements.
Thanks to real-time analysis, we can assess trends and
determine which resources each site needs.
Q: Which are the main therapeutic areas in Mexico that are
driving the efforts of CROs?
A: There is a global focus on research in oncology and cardio-
metabolic areas. However, we are investing to gain terrain in
late-phase studies through ICON’s new Commercialization
and Outcome hub in Mexico.
ICON is an international clinical research company founded in
Ireland in 1990 and present in 37 countries. It operates as an
outsourced developer for the pharmaceutical, medical devices
and biotechnological industries
170 Q: What mix of drugs does Cecyc Pharma test?
DA: As an authorized third party for COFEPRIS we are
focused on generics but we also test new combinations of
drugs, which is becoming more common in the industry.
We offer the pharmaceutical industry registry renewal
and elaborate new registers with the development of
bioavailability studies.
Q: What are the main regulatory issues companies
registering generics face and how are those overcome?
MR: COFEPRIS has fixed the processes for each type of
drug. We are a third party authorized by COFEPRIS and we
are its experts on clinical research. The biggest challenge is
when COFEPRIS regulation does not specify which study
should be undertaken for a certain drug. That is where we
intervene and propose which study should be undertaken
to obtain registration. We mostly deal with generics but as
a research center we offer advice on other types of drugs
like new registrations or combinations, anything that goes
in a category that COFEPRIS has not yet determined.
HA: In 1998, the Mexican government launched a program
to create interchangeable generics. There was a great need
in the healthcare sector for affordable and high-quality
drugs so the federal government started a drug evaluation
program and created NOM - 177 for bioequivalence tests.
In 2005, an agreement was reached to re-register all drugs
in Mexico. This forced laboratories to guarantee good
practices and quality providers. Also, registered drugs
that were not a reference product or an innovative drug
had to comply with a bioequivalence test. From 2005
there were also changes in the manufacturing practices:
NOM - 059 made producers comply with new regulations,
NOM - 220 demanded pharmacovigilance and NOM - 177
regulated bioequivalence. All three had a regulatory impact
on manufacturing and commercializing drugs in Mexico.
Cecyc Pharma is in the medical research area, in which we
evaluate the efficiency of drugs. Laboratories may not have
much clarity on the steps they have to follow or the type
of studies they must undertake, especially now when there
is a larger variety of studies available, so our mission is to
help them run the right study.
Q: Do laboratories need more regulation or more clarity?
HA: The regulatory aspect is more than covered. When
COFEPRIS was born, regulation became a headache for
many companies in the industry. However, because of
it, companies became better and Mexican laboratories
gained the option to export because they complied with
international regulations. Laboratories should make a
greater effort to adapt to the rules. Sometimes, it can be
complicated, but at Cecyc Pharma we keep in close contact
with COFEPRIS to always propose the right study for each
case. As an authorized third party, we help companies
when they need regulatory advice, we become their
channel to register new drugs. We do the clinical research
that companies need to show COFEPRIS their products
are safe and efficient. We are also in charge of dissolution
profiles, clinical phases, protocol creation and analytical
methodology. We specialized in this to offer our clients an
efficient solution.
Q: Previously, a generic could rely on the safety and
efficiency results of the innovative drug. Is this still the case?
MR: When a company develops an innovative drug, the
drug must pass through the phases of medical research
to prove safety and efficiency. What the Mexican authority
asks of generics is that they prove their bioequivalence
with the innovative drug. COFEPRIS asks the manufacturer
for studies done on humans to see if the medicine is
absorbed and eliminated by the body in the same manner
as the innovative drug. There is no need to do all the
VIEW FROM THE TOP
Cecyc Pharma is an authorized third party located in Mexico
City. Its goal is to provide integral outsourcing solutions
and services to the pharmaceutical industry in the clinical,
analytical and regulatory areas
Mezly RodríguezOperations and Strategy Director of Cecyc Pharma
Héctor ÁvilaDirector General of Cecyc Pharma
Diego ÁvilaCommercial Director of Cecyc Pharma
AUTHORIZED THIRD PARTIES PROMOTING MEXICO’S RESEARCH POTENTIAL
171
phase studies. What has changed is that there are new
combinations between drugs that are not innovative and
drugs that already exist. We prove safety and efficiency
for drugs that already exist or we prove they do not
interact between them.
Q: How do you determine that two drugs are
bioequivalent?
HA: It would be absurd for a national or international
laboratory to repeat the preclinical test that the laboratory
that approved the molecule already did. There is an efficient
international scale to prove that a drug is as efficient as the
original. If I get the same profiles from a manufacturer, I
assume it will have the same effect. Bioequivalence proof
takes between five and eight months. All we do is reduce
it to a graphic. The graphic shows the relationship between
the time and quantity of absorption of the drug. With all
those who participate we show a drug was absorbed in a
certain quantity in a certain amount of time. The product
we are evaluating should behave similarly and within
the parameters of 125-80. This is an internationally used
number that determines if drugs work equally or not.
Q: How do you recruit volunteers for testing, especially
given advertising restrictions?
MR: We have a recruitment department in charge of
attracting people to participate in our studies and once they
get involved, we follow their progress. All our trials must
be done on healthy volunteers because we need to start
with a group of people who present similar characteristics
but who have no illnesses that would influence the result.
Internally we have many filters to ensure they are healthy.
When testing physiotoxic drugs, those that are dangerous
or affect health, volunteers should be patients suffering
from the illness the drug is designed to treat. We have
developed a database of volunteers who are constantly
participating. We perform lab tests on them, compile
a clinical history and perform a checkup. If they have a
condition like high cholesterol, we offer them treatment
and a follow-up. By testing our volunteers we can also take
a look at the population in general.
Q: Is it difficult to find healthy volunteers given the
burden of chronic diseases in Mexico?
HA: Yes, regularly many people come without antecedents
but when tested we discover they sometimes have high
cholesterol or conditions of this type. In those cases,
we recommend a diet and ask them to come back at a
future date. For our studies, we interview around 2,500-
3,000 people and every year we can see by their studies
how the population’s health has changed. The products
we tested 10 years ago, now have a different impact on
the population because people have also changed. It is
important to consider that the Mexican population has
particular characteristics given the local diet. That is why
COFEPRIS asks for tests for imported products to be
performed on the Mexican population.
Q: What are your objectives for the next five years?
DA: It is important to keep expanding our services. We are
always looking to give more to the industry and become
a unique company in the sector. We have authorizations
from COFEPRIS and the Institute of Public Health in
Chile. They are for dissolution profiles, clinical units and
clinical analysis. We also provide APIs for the industry,
pharmaceutical development and advisory, and we are
working with biotechnological companies. We have
clients in Chile, Colombia, Puerto Rico and the Dominican
Republic. However, we want to work with more foreign
companies that will soon arrive in Mexico because this
is an interesting market for them. Also, we want to gain
more certifications because it would allow us to reach
more countries so our clients would be able to sell to more
countries with a single study.
172
TECH ADVANCES MAKE HEALTH INDUSTRY HIGHLY ATTRACTIVE
Q: What percentage of ANCE’s activities is in the health
sector? Which segment offers the greatest potential?
AH: We are mainly focused on security and risk management
but our key operations are in electro-technology, which
accounts for about 60 percent of our activities, while a
bit over 35 percent is in rational use of environmental
resources and 2.73 percent is in the food and the health
sectors. We entered the health industry with expertise on
intelligent regulation. The state must regulate the liberties
of economic players – the possibilities for producers
and the needs of consumers – in order to improve the
quality of life of its citizens. Mexico is a big consumer of
health products like medical devices and drugs. ANCE is
betting on medicines because the growth of the health
industry is highly attractive in terms of technological
development. Moreover, Mexico’s quality of life is improving
and the country is among the most attractive regarding its
economic and social growth potential.
Q: Of the services ANCE offers, which attract the most
demand?
YM: ANCE is an authorized third-party. Medical devices
represent the largest segment of our health market, about
80 percent of applications we receive. The most in-demand
service is sanitary registration of innovative technologies.
Q: What benefits can ANCE offer its clients that other
authorized third-parties cannot?
AH: We focus on differentiating ourselves from our
competitors through high-multidisciplinary expertise, as
multidisciplinary analyses can reduce response times while
increasing service effectiveness. Our value proposition
is reliability, IT and institutional strength. ANCE also
implements best practices regarding testing, inspection
and certification from its experience with international
compliance-evaluation systems.
Q: How much does ANCE’s technology innovation
center in Nuevo Leon contributes to the health sector?
YM: We have experience in test laboratories and look
forward to applying this experience to the health sector.
ANCE is defining which products will be the first to be
tested in our labs, because we expect significant growth
in validations, inspections and tests in Mexico and globally.
By the end of 2017 ANCE will be performing lab tests for
the food and health sectors.
Q: What will be the focus for health innovations in the
coming years?
AH: Innovation for hospitals is directed toward intelligent,
interconnected medical devices that monitor vital signs,
administer medicine or perform medical interventions. This
is in line with a global trend called assisted life environment.
YM: Biotechnological products are going to be the medicine
of the future. Pharmacogenetics will prevent diseases by
addressing genetic deficiencies that predispose people
to certain diseases. Nanotechnologies will also be an
important area. Small robots will target tumorous cells
and administer antitumor medicine directly instead of
administering it in general and damaging both the tumor
and healthy cells as some oncologic medicines do.
Q: What is ANCE’s contribution to Mexico’s health industry?
AH: We attract attention to the required regulations.
Health is a dynamic sector with expected growth of
50 percent between 2015 and 2020 in the pharma
segment. If COFEPRIS is saturated with requests for
sanitary registrations as of 2017, it will be overwhelmed
by 2020. We are in an era of disruptive innovation
and new technologies and developments will require
a flexible legal framework. ANCE is part of several
regulation and standardization associations such as the
National Commission on Normalization (CNN) and the
Normalization Commission of the Industry Chambers
Confederation (CONCAMIN). We try to make private
initiatives more pro-active regarding the development of
regulations. The private sector will be required to propose
solutions and options as COFEPRIS becomes inundated.
Yoloxóchitl MacíasChief of Health Area of ANCE
Abel Hernández Director General of ANCE
VIEW FROM THE TOP
ANCE is an association founded in 1992 that provides
support by certifying industry standards and compliance with
regulations in industries such as automobile, energy, health
and construction
173
while medicines were ignored. In 2015, we did not reach our
pharma goals. Therefore, in 2016 we changed our strategy
and focused on medicine rather than medical devices. It
was a challenging decision because drugs require much
more responsibility and capacity than the other business
line. We are working with Pfizer and more organizations
are considering our services, mainly because we provide
additional benefits. This has given us the opportunity to
register several specialized operating cells during 2016.
Q: What does NYCE need from COFEPRIS to improve
its operations?
A: The creation of the authorized third party system was
a great decision. The government’s acceptance that its
internal structure could not deal with the volume of demand
was a good move. We have 22 years of experience as a
standardization organism, 21 as certification institution and
20 as a verification unit. However, we recognize some third
parties are facing operational constraints. The new NOM-
057 regulates the pharmaceutical industry but authorized
third parties are not allowed to provide certificates under
this standard. NYCE is allowed to verify food content labels
for the alimentary industry but is not authorized to verify
nutritional information, despite the fact that we operate
in the health industry. If we want integral solutions for the
market, we should be able to offer both services.
Q: What are NYCE’s plans for the near future?
A: We want to grow our market access by regionalizing our
services. We can help organizations export their products
to other countries of the Pacific Alliance. Hypothetically
speaking, if COFEPRIS closes an agreement with the
regulatory authorities of the Pacific Alliance countries,
authorized third parties would be able to provide services
to the whole region. It is an idea that may help many players
in the system.
Q: What aggregated value does NYCE offer that gives it a
competitive advantage?
A: Third party organizations create standards for the
industry. NYCE has an 18-year-old quality system that
relies on the constant improvement of our activities. In
our healthcare division, we have three elements to achieve
this. First, our management system must control and define
metrics to improve our efficiency. Second, we have an
internal program called Unifying Hands and Efforts through
which collaborators suggest initiatives. Our third element
is the satisfaction surveys we send to our clients, where we
measure market perception and receive feedback. These
three improvement tools have helped us achieve an average
of 97 percent customer satisfaction.
All 330 of our staff members have been trained in client
service. In fact, we trained COFEPRIS staff on the same
subject because it is one of our strengths. Our last COFEPRIS
audit was excellent, which motivated us to participate in the
National Quality Price. Those are elements that give us a
competitive advantage against other companies.
Q: How can you improve processing efficiency for your
clients?
A: In January, we launched an online system to assist clients.
We have already implemented electronic tools for many of the
other industries we work with. In oil and gas, electronics and
communications we have a secure online depository to protect
information. If an industry accepts our security measures, a
confidentiality agreement and responsibility for information
management, companies will not have to be present physically
for every procedure they need. They will save time and money
with us. We are an organism that certifies information security
through ISO 2700. We are certifiers of personal data security,
giving us another competitive advantage.
Q: What type of healthcare companies are you focused
on certifying?
A: When we first started our activities in healthcare, we
noticed a large need for medical devices. We focused
on that but then we realized that the existing number of
authorized third parties fully covered the devices sector,
DIVERSIFICATION KEY TO GROWTH
CARLOS PÉREZDirector General of NYCE
VIEW FROM THE TOP
Normalización y Certificación Electrónica (NYCE) is an
authorized third party that certifies electronics, medical
devices, medicines, information security and food labels. It is
looking to further expand its operations
174
Q: What challenges in implementing the pharmacovigilance
NOM in biotech is UDIBI helping overcome?
A: The law in Mexico is not designed to provide security for
biotechnological drugs because it does not consider relevant
aspects related to their nature. The regulations demand
reports of adverse events but they do not control the post-
marketing phase to prevent them from occurring. In biotech, it
is necessary to know what happens when the drug reaches the
open population because patients might present therapeutic
failure or develop antibodies against the drug, which is
not reversible. Once the organism has produced antidrug
antibodies, the patient cannot take the drug or another related
drug because the antibodies would neutralize its effect. There
should be active vigilance in testing patients taking biotech
drugs, which would help pharmaceutical companies gauge
when to intervene or when to stop administrating the drug.
This is a totally different concept to pharmacovigilance.
Therefore, we must make recommendations to COFEPRIS
and other health institutions about the pharmacovigilance of
proteins because it is conceptually different.
Q: What more can regulators and companies do?
A: Regulatory institutions and manufacturing companies
should take greater responsibility. In other countries, regulatory
agencies also monitor the market. They do not solely rely on
the information provided by manufacturers. They have fixed
verification measures, which is lacking in Mexico because
there is not enough infrastructure to handle the demand.
Mexico also needs a more consolidated pharmacovigilance
culture. From the beginning of a drug’s life onward we should
be checking the patient’s reaction to the drug.
Q: How can Mexico overcome its biotech development
limitations?
A: Our regulatory system is rigid, pyramidal and based on
the political constitution, the general health law, the ISOs,
VIEW FROM THE TOP
NOMs and pharma regulation. To modify something, we have
to work from basic issues. Unfortunately, in Mexico science
moves faster than law. Everything has to go through a legal
process in which the different chambers have to approve it
and by the time this happens, science has already moved on.
A few years ago, the concept of biotechnology did not even
exist in the law. It took us two years to establish NOM-177,
which is already obsolete. Trying to change it will take us two
more years and by then it will be outdated. We have a real
issue with this regulatory path because we cannot produce
guidelines easily. There is a group of researchers like me who
are trying to speed up the process for updating guidelines.
Usually, we follow what is already published by international
agencies such as the FDA and EMA, but sooner or later our
normativity must change because we operate differently
from other countries. The WHO is also asking for it and
COFEPRIS is becoming a more concrete regulatory agency
with a strong group of experts but we lack the dynamism
to improve it. Without clear guidance, we will have to check
every case individually. If we do not have an established
metric for evaluation, the process becomes complex.
Q: What are your expectations for the future of biotech
in Mexico?
A: If we become more competitive, Mexico could be a
reference for evaluation of biosimilars worldwide due to
its geographic location and because many countries are
looking to access other markets. Furthermore, laboratories
like UDIBI could continue supporting the authorities since
they do not have the infrastructure required to evaluate new
molecules. The knowledge we gather when we perform a
detailed evaluation might be useful in developing innovative
molecules. Mexico has great potential, but our innovation
system is not articulated. In other countries, the academy and
the industry have been working hand in hand for years, while
in Mexico the science and technology law was implemented
just last year. This will advance technology but laboratories
like ours that already know the path of elemental testing must
provide an opening to innovative Mexican drugs. We will also
start attending technology summits in the US because we are
now working with US companies that have reached out to us
due to our high-quality service at lower costs.
CHALLENGES, OPPORTUNITIES EMERGING IN BIOTECHSONIA PÉREZExecutive Director of UDIBI
The Unit for the Research and Development of Bioprocesses
(UDIBI) is a part of the National School of Biological Sciences
of the National Polytechnial Institute (IPN) and is an authorized
third party
175
create awareness about the creation of new calibration and
accreditation laboratories.
Q: What ratio of sales in your biomedical business is destined
for the public sector?
A: We have only recently entered the biomedical business
in Mexico and we mostly cater to the private market. In the
future, we will venture into the public sector to ensure growth
because the public sector is the main client for these products.
In our analytical business, our sales are split 50/50, which
is where we will probably end up in the biomedical market.
Q: What new areas will you look to expand to and what will
be your focus in 2017?
A: There is still a long way to go in Mexico in health and
in the medical segment, so focusing new investment in
health and life sciences research makes good sense. It
fits with our mission to change and improve the world
through the work of our clients. When they reach their
goals, we have contributed to future generations having
better care and quality of life. Perhaps we will expand
our horizons to the north and to the south of Mexico, as
we have done for analytics. In the medical area, I think
we will first expand to the north of Mexico and then go
nationwide. We are also opening an office in Texas for
analytics and offer services in Central America.
Q: What is the impact of the security environment on your
logistics operations?
A: Our logistics are specific, not massive, so we are little
affected by insecurity. What may impact us is the coverage
of our clients in certain territories where we need to be more
careful. What we need to look after most is not the products
that we move, because those are unlikely to be impacted by
insecurity, but ensuring that our people can come and go
in safety. This impacts us a little, but it is not a major issue.
Q: Analitek has a national presence. What is the company’s
strategy to maintain, or even accelerate growth?
A: Internal growth occurred because our markets and
territory were becoming saturated. We looked for new areas
to work in such as life sciences, which is a much larger
market. In the biomedical field, we want to be a company
that medical service providers can rely on, knowing that
their equipment functions properly and precisely. We
connect international manufacturers to national customers
and we offer services to ensure the products, equipment
and instruments always provide the correct results. In this
way, our clients can ensure their patients they are receiving
medical services that will improve their health.
All equipment requires a continuous maintenance program.
This should happen several times per year, depending on
the piece of equipment. Through use and time, all analytical,
electronic, mechanical and medical equipment may lose
their accuracy and calibration, which makes well-designed
maintenance programs a must.
Q: To what extent do you have to convince clients that
your products represent an investment rather than a cost?
A: That is the challenge we face. I believe the authorities
ensure that all clinics and hospitals are providing
services correctly. Our challenge is to help our clients
appreciate that calibration and correct functioning is
elemental in healthcare. In many cases, this makes the
difference between a patient being cured or not. Foreign
companies develop the technology and the innovations,
new products, devices and treatments, but we ensure that
in Mexico all these devices work at peak performance 100
percent of the time.
Q: Which norms regulate the calibration and maintenance
of devices in Mexico?
A: We are working with the authorities to elaborate such
norms. Stricter regulations and control in this field would
ensure better treatment for patients. We are participating
in forums and working with EMA and COFEPRIS regarding
the shaping of these norms. We are also working with the
Mexican Society for Biomedical Engineering (SOMIB) to
FINE-TUNING HEALTHCAREANDRÉS FERRARA
Director General of Analitek
VIEW FROM THE TOP
Analitek, founded in 1994 in Monterrey, supplies analytics
solutions for a variety of industries including academia, life
sciences, pharmaceuticals, research and development and
chemistry. It is further expanding into biomedics
176
AUTHORIZED THIRD PARTIES EASE REGISTRATION BACKLOG
Only a few years ago, it could take up to two years for a
company to register a new drug product in Mexico. Today,
that wait time has been reduced to 20 business days.
Behind this turnaround is a decision by COFEPRIS to allow
private parties to do the leg work and put products on
a fast track to approval. These private parties, known as
authorized third parties (ATPs), perform testing and grant
acceptance of a certain category of product, although the
regulatory agency does reserve the right to reverse any
decision an ATP makes.
“As an authorized third party, we help companies when
they need regulatory advice; we become their channel
to register new drugs. We do the clinical research that
companies need to show COFEPRIS their products are
safe and efficient and we are also in charge of dissolution
profiles, clinical phases, protocol creation and analytical
methodology,” says Héctor Ávila, Director General of
Cecyc Pharma, an authorized third-party in Mexico City
that specializes in bioequivalence testing.
The appearance of ATPs has helped to clear the backlog of
pending authorizations. Products are now registered much
faster, albeit with the same level of security and testing
before being allowed onto the market. The system has
been widely praised by industry insiders. “Speeding up
processes through authorized third parties helped make
the regulatory procedures more efficient and thus increased
the attractiveness of Mexico as an investment destination
for health,” says Geraldine Rangel, Director General of
Healthlinks, a Mexican firm that provides market analysis
to companies wishing to enter Mexico.
Between 2005 and 2014, US$1.7 billion was invested in
Mexico in the medical devices sector, mostly in Guadalajara,
Tijuana, Nuevo Laredo and Matamoros,
according to ProMéxico. Investment in the
pharmaceutical sector in the same period
almost doubled that at US$3.2 billion,
according to government figures, and in
January 2017, COFEPRIS signed an agreement with industry
players hoping to boost investment in clinical research from
under US$200 million to US$600 million per year in the
next two years.
According to a COFEPRIS 2014 press release, ATPs had
reduced authorization wait times from an average of two
years to 20 business days. “The creation of the authorized
third-party system was a great decision. The fact that the
government accepted that its internal structure could not
deal with the volume of demand was a good move,” says
Carlos Pérez, Director General of NYCE, an authorized third
party that works across sectors.
To become an ATP, there must be no conflict of interest,
the lab must have the technical, human, financial and
infrastructure capacity to carry out its function and comply
with the respective norms of the three classifications of
ATPs: testing laboratories (NMX-EC-17025-IMNC-2006),
units of interchangeability and bio-comparability (NOM-
177-SSA1-1998), and verification units (NMX-EC-17020-
IMNC-2000). As of May 2017, there are 122 authorized
testing laboratories, 62 units of interchangeability and bio-
comparability and 26 verification units. Each authorization
is valid for a period of two years and must then be renewed,
ensuring standards are kept. In the first five months of 2017,
four ATPs lost their status, which can be regained once
conditions are met again.
But challenges remain. As science and medicine advance,
regulation sometimes struggles to keep up. “The biggest
challenge is when COFEPRIS regulation does not specify
which study should be undertaken for a certain drug. That
is where we intervene and propose which study should be
undertaken to obtain registration,” says Mezly Rodríguez,
Operations and Strategy Director at Cecyc Pharma.
The next step, many hope, is for other countries to recognize
Mexico’s authorized third parties to improve exporting
conditions to Central and South America. “Hypothetically
speaking, if COFEPRIS closes an agreement with the
regulatory authorities of the Pacific Alliance countries,
authorized third parties would be able to provide services
to the whole region,” says NYCE’s Pérez.
ANALYSIS
All drugs sold in Mexico must be tested by COFEPRIS, which
led to a backlog that has since been solved by the creation of
authorized third parties. This has helped the regulatory authority
speed up processes and clear the bottleneck for new products
There are 122 authorized testing laboratories, 62 units of interchangeability and bio-
comparability and 26 verification units
WHAT MUST MEXICO DO TO BECOME A CLINICAL RESEARCH HUB?
CIRO GARCÍADirector General of Accelerium Clinical Research
KAREN HAHN Director of Clinical Trial Management of ICON
ARTURO RODRÍGUEZ Director General of Infinite Clinical Research and President of ACROM
ROUNDTABLE
Mexico has strong potential to become a clinical research leader worldwide. We
have all the elements, such as population, disease profile, ensemble of trained
investigators and the local representation of the international bio-pharmaceutical
and CRO industries, as well as the support of COFEPRIS and the most recognized
agencies worldwide. However, we need to assimilate all the elements together
in the most synergistic manner to significantly elevate the total number of the
active trials in the coming years. Research sites should orient their activities to
quality and performance to attract more research projects. Mexico accounts for
less than 1 percent of all clinical research worldwide, a very low rate compared
to other countries.
IMSS now allows clinical studies, which will provide great opportunities for the
sector. The institution has a huge population of patients and is also a good
source of patients with rare diseases that are hard to find in other institutions.
In addition, Mexico has a lot of potential in pediatric clinical studies due to the
large population of children and the good relationship between doctors and
parents we have identified in previous recruitments. Therefore, ICON has already
developed expertise in pediatric studies.We have a close relationship with patient-
recruitment sites and provide quality training to professionals at each institution
so they can understand their target population. We perform a close follow-up and
we ensure we choose the right sites through a site selection system.
Mexico has long wait times, but not as long as other Latin American countries.
In Mexico, in line with FDA rules, if an efficient rescue medicine is available, trials
can be held with groups taking placebos. Mexico’s main obstacle was that it did
not have access to public hospitals, whereas in 2016 and 2017 an agreement was
reached with IMSS and COFEPRIS to open the doors to clinical research. The same
will happen with ISSSTE and other public institutions. This dramatically increases
our chances of recruiting patients. In 2016, 80 percent of trials were carried out in
private institutions. We hope to attract more trials to Mexico, maintaining the amount
carried out in the private sector but increasing the amount in the public sector to
achieve a 50/50 balance.
Mexico has a strategic geographical location, a large and
diverse population and competitive operational costs
— all the essential elements to become a global hub
for clinical research. In addition, in early 2017, President
Peña Nieto signed a collaboration agreement with IMSS,
COFEPRIS, CANIFARMA, SAT, ANAFAM and AMIIF to
promote the development of health research protocols.
A greater appreciation of these tools could increase
national investment in research and attract international
companies. Mexico Health Review spoke with three CROs
about the best strategies that can help Mexico become an
international hub for clinical research.
177
179
Imagine that after losing a limb, a patient is fitted with a prosthetic that can be
moved at will. This is the magic that bioelectronics are bringing to the world.
The future of health is now and the main challenge these companies will face is
making their advanced technology available to the wider public. These advanced
prosthetics will perform wonders but will be proportionally expensive and it is
unlikely that public institutions will provide them to patients, especially in light
of budget cuts. As new disease trends emerge, new vaccines also are needed.
A dengue fever vaccine was released in Mexico in September 2016 and many
companies are working on zika vaccines.
Another area explored in this chapter is stem cell procedures. Although they are
still subject to case-by-case approval in Mexico, research is ongoing and is led
by private companies who extract and store the cells for patients as a way of
funding their R&D. Mexico is considered a regional hub for stem cell research as
it is subject to less stricter regulations than its northern neighbor.
This chapter will feature interviews from these cutting-edge companies and will
feature technology spotlights that highlight their state-of-the-art innovations.
BIOELECTRONICS& BIOTECH
8
181
CHAPTER 8: BIOELECTRONICS & BIOTECH
182 ANALYSIS: Medicine, Devices of the Future
184 VIEW FROM THE TOP: José Benziger, Ottobock Group
186 VIEW FROM THE TOP: Luis Bravo, Probionics
188 VIEW FROM THE TOP: Francisco Soberón, INMEGEN
189 ROUNDTABLE: What are the Most Relevant Applications for Stem Cells in Mexico?
190 VIEW FROM THE TOP: Jeimy Pedraza, Instituto Ingenes
191 VIEW FROM THE TOP: Martha Luna, RMA Mexico
192 EXPERT OPINION: Rosa María Del Ángel, CINVESTAV
Enrique Villegas, ABC Medical Center
194 VIEW FROM THE TOP: Francisco Kuri, Landsteiner Scientific
195 VIEW FROM THE TOP: Félix Scott, Sanofi
196 ANALYSIS: The Black Hole of Black Market Medicine
197 VIEW FROM THE TOP: Maarten Pouw, DSM Sinochem Pharmaceuticals
198 VIEW FROM THE TOP: Abraham Franklin, Grupo Franklin
199 VIEW FROM THE TOP: Jesús Esparragoza, Biostem Technologies
200 VIEW FROM THE TOP: Victor Saadia, Bioeden
201 ANALYSIS: The Rise of the Superbug
182
MEDICINE, DEVICES OF THE FUTURE
three diseases from the WHO 2017 priority list
it considers could be the next epidemics: Lassa
fever, Middle East respiratory syndrome (MERS)
and the Nipah virus. According to clinicaltrials.
gov, as of July 2017 there were two ongoing
Lassa fever trials, 10 for MERS and one for the Nipah virus.
Stem cells are another promising area but here too, the
segment is embroiled in controversy. Private companies
that extract and store stem cells for patients as a way of
funding their R&D are leading the way in research; however,
procedures are still subject to case-by-case approval in
Mexico. Easier regulations than in the US have made the
country a regional hub for this research for applications
as varied as preventing wrinkles and curing cancer. But
here too, outdated laws and lack of awareness despite
an abundance of information are keeping the sector from
reaching 100 percent potential. “Processes are limited by
laws that are 10-15 years old and policymakers are slow to
react to innovation. Mexico is a pioneer in this area so there
are fewer countries to copy from and thus more fear, which is
normal. This can be solved by reading scientific information,
which is available for all, and there are many aspects that
have already been tried and tested. It is a waste of time
and money to repeat those tests here, since that money
could be used for further research. Regulation of dental
stem cells in particular is scarce and mesenchymal cell
regulation is tied to that of hematopoietic cells. COFEPRIS
is conscious of these things and is moving forward. We are
not completely blocked by legislation,” says Victor Saadia,
CEO and Founder of Bioeden Mexico and LATAM and CCO
Bioeden USA, a company dedicated to stem cell research.
Like stem cells, fertility procedures are the subject of debate:
for some, these procedures go against God’s will or interfere
with nature, while for others they represent hope, either to
conceive or to do so without passing on a genetic condition.
Mexico offers state-of-the-art technology in this field, with
some clinics such as RMA Mexico working closely with the
US. Research and Markets puts infertility and obesity as the
main factors driving demand globally.
In addition, genomic or precision medicine was pegged as
a global medical technology trend for 2017 by the World
Economic Forum. Markets and Markets estimated the value
of the global genomics market at US$12.5 billion in 2015
and expects it to hit US$20 billion by 2020. Mexico’s public
institute dedicated to genomics, INMEGEN, is collaborating
with international institutions to advance science and with
government-owned oil giant PEMEX, that provides health
services to its workers, to begin implementing precision
Biotechnology, from the development of vaccines to the use
of stem cells, has opened a range of possibilities for medicine
and health, including the use of genomics to pinpoint the
appropriate medicine for a particular disease and improving
fertility or ensuring a baby does not suffer from a genetic
condition. But strict regulations, high costs and even personal
viewpoints stand in the way.
Despite recent debate over the use of vaccinations, they
remain among the most significant advances in preventive
medicine of the past century and a half. As new disease trends
emerge, new vaccines are required. Inovio began trials for its
second zika vaccine in June 2017, while Sanofi Pasteur with the
US Army; Fiocruz, Takeda and Moderna with Barda; and GSK
with the NIH are working on their own vaccines for the virus.
A dengue fever vaccine was released in Mexico in September
2016, although it is only available privately in Mexico.
"Mexico was the first country to register the dengue vaccine.
We are leaders in emerging economies because we work to
meet the specific needs of patients in those countries. Mexico
played a key role in the investigation of the dengue vaccine
because, among the 15 countries included in the research
program, it was one of only two countries, along with the
Philippines, that participated in the phase I clinical studies.
That is why Mexico became the first country to obtain the
sanitary registry: it was a collaborative approach with the
country’s health institutions that allowed us to establish
the necessary processes to comply with the many strict
requirements of the authorities and to provide them with
solid local data. It was not an easy process but it was also
the first time that COFEPRIS had certified a new vaccine
before agencies such as the FDA and the EMA," says Félix
Scott, Director General and Country Chair of Sanofi. "We are
developing research within our global operations for other
vaccines, including one for zika. We have a collaboration
agreement with the US Army to conduct research into this
type of infection and we believe we are in the best position
to achieve a fast and efficient solution for zika after our
experience with the dengue vaccine. We must apply this
know-how to achieve answers as soon as possible."
Unfortunately, these medicines take years to develop. In an
attempt to pre-empt the lag between the emergence of an
epidemic and the development of a vaccine, the Coalition
for Epidemic Preparedness Innovations (CEPI) has selected
ANALYSIS
Biotech and bioelectronics are at the forefront of medical
innovation. Ranging from vaccines and stem cell research,
to robotic limbs connected to the central nervous system,
this is the medicine of the future
183
PRIORITY 1: CRITICAL
1. Acinetobacter baumannii, carbapenem-resistant
2. Pseudomonas aeruginosa, carbapenem-resistant
3. Enterobacteriaceae, carbapenem-resistant, ESBL-producing
PRIORITY 2: HIGH
4. Enterococcus faecium, vancomycin-resistant
5. Staphylococcus aureus, methicillin-resistant, vancomycin-intermediate and resistant
6. Helicobacter pylori, clarithromycin-resistant
7. C ampylobacter spp., fluoroquinolone-resistant
8. Salmonellae, fluoroquinolone-resistant
9. Neisseria gonorrhoeae, cephalosporin-resistant, fluoroquinolone-resistant
PRIORITY 3: MEDIUM
1. Streptococcus pneumoniae, penicillin-non-susceptible
2. Haemophilus influenzae, ampicillin-resistant
3. Shigella spp., fluoroquinolone-resistant
medicine. Private companies are also working in this area
such as Mexican company Landsteiner Scientific. “We have
recently opened a new platform in genomic medicine focused
on oncology. Landsteiner is starting with colon cancer, a
common disease among men in Mexico and the US,” says its
Vice President, Francisco Kuri. “The genetic information of
a population is used to identify genetic traits that can help
either control or cure the prevalent diseases. Our industry
evolved into personalized medicine but now the discourse has
evolved into precision medicine. We know that some drugs
do not work equally well in different populations. Genomic
medicine could show what medicines work best according
to common Mexican genetic traits.”
Imagine that after losing a limb, a patient is fitted with a
prosthetic that can be moved at will. This is the technology
that bioelectronics wants bring to the world. Probionics,
the first Mexican company to build prosthetics, is seeking
approval for its upper artificial limbs that use myoelectric
technology to detect a pulse through the chest muscles to
control movement. Össur, an Icelandic company, is working
on developing upper and lower limb prosthetics that connect
to nerve endings and thus the brain. “Bionic products are
intelligent pieces with microprocessors. In the case of knees,
the microprocessors communicate with ankles and feet, so
if the patient trips, the knee locks, preventing the patient
from falling. This is automatic once a sudden movement is
detected. Our most advanced hands are the Michelangelo
hands. They have sensors so that when grabbing a cup, the
hand grasps with the correct amount of strength not to break
it and not spill the contents. If the cup is made of glass, the
hand will not shatter it, if the cup is made of plastic, the hand
will not squeeze it so hard that it distorts and the contents
spill down the sides. It also has a rotating wrist like a real
hand,” says José Benzinger, Director General of German
market-leader Ottobock. Analysts at Future Market Insights
pegged the value of the global orthopedic prosthetics
market at US$1.6 billion in 2015, 56 percent of which is lower-
extremity prosthetics. Amputations caused by diabetes in
Mexico are also increasing the need for prosthetics. “In 2017,
emphasis should be placed on the prevention of diabetes and
its complications. Data from [ENSANUT 2016] show there has
been a 175 percent increase in diabetic foot amputations,”
says José Campillo, Executive President of FUNSALUD, a
private foundation dedicated to improving community health.
The future of health is now and the main challenge these
companies will face is making their advanced technology
available to the wider public, as Benzinger notes. “As we are
a cost-sensitive market, price is an issue for bionics in Mexico.
Most private insurance companies may cover these types of
products if specified but the majority of patients pay out-
of-pocket. Their cost means they are only available to some
segments of the population.”
• Arenaviral hemorrhagic fevers (including Lassa fever)
• Crimean Congo haemorrhagic fever (CCHF)
• Filoviral diseases (including Ebola and Marburg)
• Middle East respiratory syndrome coronavirus (MERS-CoV)
• Other highly pathogenic coronaviral diseases (such as severe acute respiratory syndrome (SARS)
• Nipah and related henipaviral diseases
• Rift Valley fever (RVF)
• Severe fever with thrombocytopenia syndrome (SFTS)
• Zika
Source: WHO
Source: Mordor Intelligence 2015
REVISED LIST OF PRIORITY DISEASES, JANUARY 2017
WHO 2017 PRIORITY PATHOGENS LIST FOR R&D OF NEW ANTIBIOTICS
THE GLOBAL BIOPHARMACEUTICAL MARKET (percent)
Intro Chapeter 8
� 37.32 Monoclonal antibodies
� 21.37 Synthetic immunomodulators
� 20.06 Vaccines
� 0.59 Recombinant growth factors
� 2.39 Recombinant enzymes
� 2.32 Purified proteins
� 0.48 Recombinant proteins
� 0.12 Others
184
Q: What is the current size of the Mexican prosthetics
market and what is Ottobock’s share?
A: Our prosthetics division is our core business worldwide
and also has the most sales in Mexico. Eighty percent
of our sales are basic products. Diabetes is prominent
in Mexico and as a result, lower limbs are the most
common amputations. According to the Mexican Diabetes
Association, about 75,000 amputations are performed each
year because of this condition. Of those, 90 percent are
lower limbs, so foot, below the knee and above the knee
prosthetics are the most commonly required.
It is difficult to approximate our market share but based
on the number of tenders we have won and our B2B, we
estimate it to be 45-50 percent. Of the total number of
amputees in Mexico, we estimate that 7-10 percent receive
a prosthetic. Of those, only three quarters will continue to
use the prosthetic. The other quarter stops because the
prosthetic is badly made and causes the patient pain.
Q: What is Ottobock Group’s relationship with the public
and private sectors?
A: We participate in both tenders and direct purchases with
the government. In addition, we support our customers that
participate in tenders. We do not sell directly to patients
in the private sector. The company has a B2B segment
through which we sell to orthotic and prosthetic stores that
in turn sell to patients. We also sell to private insurance
companies and thus patients. Generally, 90 percent of
our business is B2B. When we win a tender, we provide
education to the institutions and ensure continuous visits
to revise the process. Twice a year, and we hold an event
with staff and experts from Germany, the US and Brazil to
teach new techniques and revise current techniques. We
visit most of our customers at least twice a year.
Q: What hurdles do your products face in the Mexican
market and how can that be overcome?
A: The public market is price sensitive and our competitors
from South Korea and China have lower manufacturing
costs and quality. Although some purchasers from public
tenders can relate to quality, most relate to price. This is
our main concern because there is no established regulation
for importing and selling. COFEPRIS regulations for our
medical devices are not excessively complex; we need only
give notice of import and commercialization. We do not
need to do any further studies or background checks and
it is relatively easy to import both high-quality and low-
quality products.
Our customers have established statu quo operations, but
they are also facing other competitors arriving from China
that say they can implant at a lower cost. This threatens the
credibility of the procedure, not the brand. Many patients
say they do not want a prosthetic because they think it
hurts, or because they think they will not be able to use
them or walk. This reputation emerged due to the bad
experiences some have had with low-quality products.
Q: What are Ottobock group’s protocols for rehabiliation?
A: The protocol we are trying to build handles three
rehabilitation schemes: preprosthetic, postprosthetic and
using the limb with the prosthetic. None of these happen in
reality. When a patient requires an amputation, the patient
is taught to bandage the remains and it is important for
the limb to gain form and then start the prosthetic process.
After amputation, the greatest challenge a patient will
face is the size of the remaining limb as it swells and then
reduces but once the rehabilitation process begins it will
swell again and then reduce to its final size.
We first work on the socket. We create a test socket,
which is what the patient will use while they get their limb.
After 30 to 60 days the socket is resized because the limb
changes and an oversized socket will cause injury. The
socket needs to be checked every year. The patient should
go to rehabilitation but usually they do five to 10 sessions
and then are left to their own devices.
High-tech bionic prosthetics need yearly maintenance and
checkups because they have microprocessors and software
that need upgrading to function fully. Depending on the
type of prosthetic, necessary maintenance can vary. The
basic mechanical leg is the most common in Mexico. These
PROCEDURE, NOT BRAND, THE ISSUE FOR PROSTHETICSJOSÉ BENZIGERCommercial Director for Mexico and the Caribbean of Ottobock Group
VIEW FROM THE TOP
185
by an orthopedist, an endocrinologist, a vascular surgeon
and a psychologist, which is what usually happens in other
parts of the world. In Mexico, the approach is separate. A
knowledgeable patient may go to the orthopedist or the
vascular surgeon by themselves but they are not sent there.
Our growth would be based on getting these physicians to
agree on a protocol for patients facing amputation.
The actual amputation is usually performed by a surgeon
or an orthopedist. Afterward, nothing happens. In the US,
the following day a prosthetics team is sent to evaluate
the patient. It may not result in an immediate prosthetic
but psychologically the patient experiences a 180-degree
turnaround in mindset, instead of having them wake up
every morning with only half a limb.
Q: What other challenges does Ottobock face here?
A: Budget is the greatest challenge because institutions have
limited funds for prosthetics. Those that offer them are social
security, Integral Family Development (DIF), the military
hospital and PEMEX in some cases. Many people go to the
National Institute of Rehabilitation (INR), which also operates
on a limited budget. The foremost solution is for the public
health system to realize that diabetes is a public health issue
in Mexico, so complications of that issue are going to arise in
the near and not-so-distant future. If they ignore this, it will
bite back later. If those 75,000 yearly diabetes amputees are
to have a productive return to working life, the system will
have to invest in their treatments.
The Ottobock group consists of four units, including Otto Bock
HealthCare (medical technology). The prosthetics division is the
largest business unit of Otto Bock HealthCare GmbH, which has
distribution and service companies in 50 countries
are low maintenance, with a lifespan of five to 10 years.
Maintenance is required only every two to three years
because they are sturdy.
Q: What advantages do bionics have and what are your
top products in this area?
A: Bionic products are intelligent pieces with microprocessors.
In the case of knees, the microprocessors communicate
with ankles and feet, so if the patient trips, the knee locks,
preventing the patient from falling. This is automatic once a
sudden movement is detected. Our most advanced hands
are the Michelangelo hands. They have sensors so that when
grabbing a cup, the hand grasps with the correct amount
of strength not to break it and not spill the contents. If the
cup is made of glass, the hand will not shatter it, if the cup
is made of plastic, the hand will not squeeze it so hard that
it distorts and the contents spill down the sides. It also has
a rotating wrist like a real hand. The Michelangelo hand and
the X3 knee are the most technologically advanced pieces.
The X3 knee was developed alongside US Navy Seals and
it is the knee they use to return to active duty after injury.
As we are a cost-sensitive market, price is an issue for
bionics in Mexico. Most private insurance companies may
cover these types of products if specified but the majority
of patients pay out of pocket. Their cost means they are
only available to some segments of the population.
Q: What is your growth strategy for Mexico?
A: We decided on a basic approach. We need to create
protocols that get patients to institutions and help them
receive a prosthetic limb. There is a lack of awareness
on the part of patients about how to get a prosthetic. A
diabetic patient, for example, is handled by a doctor or an
endocrinologist. A lower limb complication should be treated
The Genium X3 being used in water
186
Q: Which of your products represent the biggest
opportunity for Probionics?
A: We founded the company in 2006 with a core R&D
business in prosthetics for amputees. We began by developing
technology for a prosthetic hand, then a wrist, a forearm and
then an elbow and a shoulder. We have modified the electronic
base of the device and we work with myoelectric technology,
an electronic principle that registers the electric flow of the
skin when the patient contracts a muscle. This electric signal
goes into an electronic chip, on which we perform a procedure
to digitalize it, making the muscle the control tool for the
patient. We also make rechargeable batteries with a biological
shape that powers the whole system. We now have a mature
technology that we are working to commercialize. However,
our products are medical devices that require COFEPRIS
certification, which is proving to be complicated because
there is no Mexican law regulating this type of device. We
are the first Mexican company doing it and are seeking
classification for these products.
Q: What are you doing to help COFEPRIS establish a
regulation and reach the next step?
A: We submitted a petition for classification, requesting that
COFEPRIS inform us which classification for medical devices is
right for our products because medical devices worldwide are
usually classified into three categories based on the risk they
represent for health. Class 1 is a device that is worn outside
the body; class 2 is for mechanisms that penetrate the body
for a short period, like a catheter, and class 3 are devices
that penetrate the body long term, like a hip prosthetic. Our
devices are class 1 because the prosthetics are external and
the patient can remove them at will.
We are cooperating with COFEPRIS by providing a detailed
description of the materials that make up the product, the
way the materials are handled when transformed from
raw material to prosthetic and on how the prosthetic is
activated. One of our main obstacles is that our prosthetics
work with a battery and an electron that registers the
body’s pulse and COFEPRIS does not regulate this
directly. The electric and electronic part of the prosthetic
arm is already certified by NYCE. We have presented the
information to COFEPRIS and now it has to work on it and
request more information from us if needed.
Q: When do you think you will have this certification?
A: We need to have a facility with certain characteristics.
The entire production line must be certified by a NOM or an
ISO and we need an operations manual. Therefore, once the
plant is ready, the auditors will evaluate it and then it takes
from eight to 12 months to get the certification. During
this time, we need to prove to them that we can produce
without selling, so it is our responsibility to assume the
cost of salaries, services and manufacturing for a year with
no income. It is incomprehensible that COFEPRIS would
evaluate our production without allowing us to sell.
Q: What are you doing to raise money?
A: We have been to different forums and our project has
garnered acclaim for its technological and social impact.
However, investors do not know the market and they would
rather invest in cheap, crude products. Our investors will not
help us until we are certified by COFEPRIS because they are
afraid of the risks this business might imply. We appeared
on Shark Tank Mexico in March 2016 and our project raised
US$1 million, the most money of the season. Nonetheless,
the money will be handed over upon meeting the conditions
for COFEPRIS certification.
Q: What are the biggest technological challenges you face
when designing and manufacturing prosthetics?
A: Patients have different degrees of injury. There are patients
who have had a wrist amputation while others are at the
middle of the forearm or at the shoulder. Therefore, the
key was designing flexible technology that could adapt by
units like Lego pieces to give each patient the module he
or she requires. It took us four to five years to understand
this because we started working on a fixed model and had
to adapt to each patient. We had to do a complete redesign
and we came up with a modular prosthetic model. Thanks
to this technology, we will go to market with 34 products, 17
modules for the right arm and 17 for the left. Additionally, we
are working on developing prosthetics for children using the
same technology and modules on a smaller scale.
MYOELECTRIC TECHNOLOGY: THE NEXT STEP FOR PROSTHETICSLUIS BRAVODirector General of Probionics
VIEW FROM THE TOP
187
Probionics is a Mexican startup founded in 2006 that designs,
produces and commercializes prosthetics. Originally starting
with hands, it has moved up the upper limb to the shoulder and
uses myoelectric technology
they do not have the money to pay for European prosthetics.
Besides innovating in technology, we will innovate in a
business model that will allow us to sell prosthetics with
deferred payments. The prosthesis will be programmed to
power down if the monthly payment is not received. This
will help us give clients easier access to prosthetics.
In 2015 we began developing fingers. We believe it will be
easier getting this product to market because globally, fingers
are the most frequently amputated limbs. At Probionics, the
amputations we more frequently see are the arms or hands
of employees who have suffered work-related accidents
or people who were in car accidents. However, finger
amputations are the most common because they do not only
happen to workers but are also caused by domestic accidents.
Q: How and who do you plan to sell and distribute your
products to?
A: Patients come to us and we manufacture the prosthetic.
We work with an orthopedist who creates the mold from
the patient so we can provide personalized prosthetics. We
manufacture the device and train the patient on how to use
it but when we get into the market we will focus on R&D
and will have a division that manufactures the products
and delivers them to our clients. We will reach the public
sector by competing in government tenders and the private
through partnerships with select orthopedic houses.
We have six patents: two in Europe, two in the US, one in
Mexico and one in South America. This is very important
because it is a negotiation tool we have with the investors.
We have 20 years of exclusivity and commercial exploitation.
We obtained our first patent in 2011 so we still have time.
However, there are countries that take longer than others.
The US issued a patent within four years and, although we
simultaneously asked for the same patent in Brazil, we are
still waiting. However, it is important for us to enter the
Brazilian market because it has one of the highest industry
indexes among South American countries. There is a direct
correlation between industry and working accidents.
Producing prosthetics is not just about being a design
engineer, we have to look at patents, read about state-of-
the-art technology, raise capital and comply with regulations.
Q: What are your expansion plans?
A: We have offers from orthopedic houses in South
America, the US and Germany. I think we will start with
South America because COFEPRIS approval is valid in those
markets. However, to enter the US we need an equivalency
with the FDA and for European markets we need one with
the European Commission.
Q: What will your strategy be to compete with international
companies?
A: We are going to compete with a good product that
meets the quality expectations of an amputee. Also, we
will compete on price. American and European prosthetics
are very expensive. An upper-elbow prosthetic in the US
costs US$150,000 and very few people have that amount
of money. There are Syrian refugees entering Europe with
missing arms and legs. They represent a large market but
NUMBER OF ORTHOPEDIC TECHNOLOGY CLINICS/WORKSHOPS
Mexico City
0 2 4 6 8 10
Zacatecas
Yucatan
Veracruz
Tlaxcala
Tamaulipas
Tabasco
Sonora
Sinaloa
San Luis Potosi
Quintana Roo
Queretaro
Puebla
Oaxaca
Nuevo Leon
Nayarit
Morelos
Michoacan
State of Mexico
Jalisco
Hidalgo
Guerrero
Guanajuato
Durango
Chihuahua
Chiapas
Colima
Coahuila
Campeche
Baja California South
Baja California
Aguascalientes
NUMBER OF ORTHOPEDIC TECHNOLOGY CLINICS AND WORKSHOPS PER STATE
2,000the approximate number of prosthetics/orthotic clinicians in Mexico
3.5million people in Mexico have mobility issues
Source: US Aid 2015
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Q: How effective would a 4P (prevention, prediction,
personalization and participation) approach be in Mexico,
where prevention is so low?
A: Prevention should be analyzed not only through old
paradigms but by thinking through new ones. Prediction,
the second of the 4Ps, is weaker when based on general
recommendations rather than personalized predictions
generated from genetic traits, the third P. The fourth of
the 4Ps is participation. It is also necessary to consider
the role of insurance companies. Imagine them inserting
themselves into personalized medicine and prevention,
managing differentiated premium costs and even complete
health-service provision systems not based on the scheme
of a hospital for sick people but based on health-promotion
systems entailing some elements of precision medicine.
Detection and analysis methods of personalized medicine
will be decreasingly invasive and increasingly automatic. This
transition will be a matter of lustrums, not even decades.
Q: What obstacles stand in front of this transformation?
A: There is a technological barrier. Technologies and
knowledge must mature and be applied. The lag is not often
in technological advancement, but in the application of
molecular diagnoses. There is a regulatory barrier too. The
FDA now will no longer approve the use of drugs for cancer
exclusively in the original organ but in any cancerous organ
with the same gene as an impeller, which is a complete change
because now the basis for cancer treatment is not the organ
but a biomarker indicative of several cancers. In Mexico, where
physicians prescribe more freely, physicians use molecular
diagnosis to prescribe for a cancer in another organ. There
is also a cultural barrier because health professionals have
not yet assimilated genomic medicine and medical faculties
still follow study programs that lack a genomic medicine
component. With cancer, it is impossible for an oncologist
to ignore genomic issues. In pharmacogenomics, precision
The National Institute of Genomic Medicine (INMEGEN) is
a institute belonging to the Ministry of Health. It is in charge
of developing projects of genomic medicine for the Mexican
population based on its genome
medicine will increase drug effectiveness and reduce adverse
effects. Soon, when a novel or unusual drug is prescribed or
a person is born, a pharmacogenetics test will be performed
and a patient’s genetic profile will last forever.
Q: Can INMEGEN train medical professionals in genomic
medicine?
A: The researchers of INMEGEN are both generating
knowledge and involved in educational programs. We
offer between four and five courses each semester for both
graduate studies and as continuous education. INMEGEN is
also putting the final touches on plans for an integral course
in genomic medicine and a series of specialized modules
on the applications of genomic medicine and is involved in
some undergraduate courses with the School of Medicine
at UNAM, but they are insufficient. An obstacle we face is
that specialists cannot do their main residence in genomic
medicine. Physicians must conclude their main residence
before moving on to study an advanced course in genomic
medicine at INMEGEN. Since INMEGEN cannot offer
scholarships at that level, students who take that course
are usually specialized physicians with a solid income.
Q: What are INMEGEN’s priorities for the next two years?
A: Continuing and finishing the characterization of Mexican
genetic diversity, applying this knowledge to the most
advanced areas of genomic medicine and finding more
correlations between genes and diseases, especially
chronic diseases. INMEGEN has a joint project with PEMEX’s
health services to develop a series of precision-medicine
services and to study rare, psychiatric and metabolic
diseases. INMEGEN will correlate genetic parameters with
these diseases in the areas of pharmacogenomics and
predisposition diagnoses to create prevention programs.
INMEGEN’s Genomic Diagnosis Laboratory will continue
offering a series of genetic tests, including an advanced
version of genomic molecular cancer tests. There will be an
incursion in the area of infectious disease through research
and data collection of common diseases constituting public
health issues. INMEGEN expects to provide specific services
in the most mature areas of genomic medicine: cancer,
pharmacogenomics and infectious disease.
MEXICO, WORLD LEADER IN GENOMICSFRANCISCO SOBERÓNDirector General of INMEGEN
VIEW FROM THE TOP
189
WHAT ARE THE MOST RELEVANT APPLICATIONS FOR STEM CELLS IN MEXICO?
VICTOR SAADIACEO and Founder of Bioeden Mexico and LATAM and CCO of Bioeden USA
JESÚS ESPARRAGOZADirector of Biostem Technologies Mexico
ABRAHAM FRANKLINDirector General of Grupo Franklin
ROUNDTABLE
The potential applications are still being researched, but in Mexico they have mostly been
used for orthopedics, lesions in articulations such as the knee, hip and shoulder or for
diabetes. We are running an interesting protocol on autism and stem cells also can be
used for neuro-degenerative diseases such as Parkinson’s. There are also intravenous
applications to help regenerate tissues and cells, as stem cells have anti-aging properties
that are popular with athletes. Stem cells help our cells regenerate. The next five years
will be very interesting. Legislation has to change and if the authorities understand that
Mexico could become one of the most innovative and leading countries in the area we
could make rapid advances. Regulation would need to be more flexible to allow R&D,
because in other countries much of the R&D is financed through bursaries and the
academic world. We are limited in this regard in Mexico.
Some studies on spine lesions have provided positive results on the implantation of
stem cells in comparison to cases where none were applied. Thus, patients prefer to
use these products with the expectation that they may work. This treatment can also be
used to treat T1D, which involves an inflammatory process that damages the pancreas.
The application of stem cells in this situation can help partially revert the damage to the
pancreas and reduce the amount of insulin that a patient will require. These cells are
injected in the pancreatic artery to slow down the inflammatory processes. It is theorized
that applying them even earlier would even have a better result. However, there are no
indications that this treatment is useful for T2D as this is not an inflammatory process
but a degenerative one. T2D must be handled through a multidisciplinary approach that
involves the government, health systems, schools and families.
We are developing cardiac cells for regenerative medicine and working with 3-D printing
to replace foot bones. We can print skin for burns and produce cells for laboratory tests,
thus avoiding animal testing. Additionally, our experts are developing beta pancreatic
cells that produce insulin, taking steps toward treating T1D. Also, we are trying to help
people who suffer from macular edema and retinitis pigmentosa by producing cells
found in the eye’s rods and cones. From MSC, we can fabricate fibroblast to produce
a serum that helps reduce wrinkles and our partners in Spain have already treated 20
patients, 18 of which saw positive results. MSC also have immunomodulating properties,
meaning the cells can reduce inflammation and rejection rates. We injected MSC into
eight paralyzed rats and after six weeks four started walking again. Parkinson’s and
Alzheimer’s are other diseases we want to treat.
Hailed by some as a wonder-cure, shunned by others due to
ethical concerns, stem cells and their research applications
are subject to great debate across the globe. In Mexico,
practical applications for stem cells are still granted on a
case-by-case basis by the authorities. During the wait for
regulation to change, companies are researching potential
applications that could be commercialized at a later date.
Mexico Health Review asked industry players to explain
which potential applications they are researching and
foresee for the Mexican market.
190
Q: What are the main fertility issues in Mexico?
A: Approximately, 15 percent of the Mexican population has
fertility issues. Among the infertile population, we include
couples who have tried for one year to conceive a baby
through sexual relations without success. Fifty percent
of the causes of infertility among couples are due to the
woman, 30 percent are related to the man and 20 percent
are a result of combined factors between the two. Among
women, polycistic ovary syndrome (PCOS) is the leading
cause, which is common in Mexican women due to genetic
or environmental factors. It expressed with irregular cycles,
propensity to overweight and obesity and it is associated
to diabetes and cardiovascular diseases. The second most
common cause is endometriosis and the third is infertility
caused by age. Other women look for our solutions because
they have previously undergone a tube ligation surgery
and wish to have children afterwards. As for men, the
main causes of infertility are genetic conditions such as
Klinefelter syndrome, testicular cancer and environmental
factors such as tobacco, drug and alcohol use or high
exposure to radiation or chemicals.
Q: What is Ingenes’ added value compared to other clinics?
A: Any laboratory can buy technology, but without
adequate experience investment means nothing. Through
the correct education of our staff, we will be able to acquire
the technology and provide professional expertise. We
are always looking to participate in international-learning
opportunities and every year we are seek to be audit by
international entities, one of the experts that audit us is Dr.
Juergen Liberman, director of the Fertility Center of Illinois.
We invest a lot in infrastructure, technology and training
to prepare the best specialists in assisted reproduction, to
provide the best services in all of our branches and we
follow strict security measures regarding the protection of
the identity of the gametes and embryos for our patients.
Instituto Ingenes is a fertility center providing services in assisted
reproduction in Mexico through in vitro fertilization, gametes
preservation and egg and sperm donation bank. It has clinics in
Mexico City, Guadalajara, Mérida and Monterrey
Q: What is your client profile and which services do they
require the most?
A: Most of our patients are infertile women with a history
of failed treatments in other centers and older patients
that seek for our services not only due to their difficulty
to conceive, but because they want to avoid the risk of
having a baby with a genetic disease. We also help couples
who are not sterile but who want their baby to be of a
certain gender to create a gender balance in their family.
Instituto Ingenes also provides solutions for people who
want to preserve their fertility and choose to store their
eggs or sperm. Currently, Ingenes develops around 4,000
treatments in its plant of Santa Fe, in Mexico City; however,
we also offer integral solutions in our sites of Guadalajara,
Monterrey and Merida. Our goal is to establish more offices,
so we can reach the entire the Mexican population.
Q: Fertility solutions are luxury procedures. What can be
done to make them available for more people?
A: There is not much public health investment in fertility
and what is available is not very complex. The technology
in the public sector does not compare to that offered by a
private institution. Fertility treatments might seem expensive
but you have to put in perspective all the investment in
infrastructure, technology and human capital behind these
types of services. At Ingenes, we offer a variety of financial
options to patients. One is BEC Facil, in which the patient
first pay only part of the program, while we prepare the
embryos to avoid any further problems associated to the
maternal age during that time. When the patient has the
economic resources to pay for the rest of the program we
proceed to transfer the embryos that were previously saved.
We also have a category of product called BEC Plus, insured
programs that were to guarantee that if the couple or patient
is not able to get pregnant, we return the investment.
Q: What would be the right preventive approach?
A: Delayed maternity is among the most important factors
affecting the fertility of women due to the deterioration of
eggs caused by age. Therefore, we must raise awareness
and inform women about the existence of technologies that
help them prevent the aging of their gametes.
VIEW FROM THE TOP
ACCESS TO FERTILITY SOLUTIONSJEIMY PEDRAZALaboratory Director of Instituto Ingenes
191
Q: What are the main trends you see in Mexico in infertility?
A: During the past couple of decades, there has been a clear
increase in the mean age of patients who undergo fertility
treatments worldwide and Mexico is no exception. Age is one
of the most important variables associated with prognosis and
outcome. As women age, there is a significant decline in the
number and in the quality of the oocytes or eggs found within
the ovary. We need to keep in mind that women are born with
an established number of oocytes and that there is a constant
loss and programmed cell death of these eggs that begins
before birth and continues until the end of the reproductive
lifespan. Around 40 percent of the patients we treat have a
significant diminution of their ovarian reserve. However, other
factors such as endometriosis, multiple ovarian surgeries,
autoimmune disorders, chemotherapy and genetic mutations
have been associated with premature ovarian insufficiency.
Q: To what extent do environmental factors impact fertility?
A: Environmental factors are often accounted for as
contributing causes of unexplained infertility. However,
there has been no clear data regarding environmental
factors affecting fertility backed up by medical evidence.
This causal relationship between such factors and the
infertility of a couple are seldom well-established. We
are told someone with a healthy lifestyle will most likely
have less difficulty getting pregnant but no scientific data
proves that. In that respect, it is important to point out
that nutrition can definitely impact fertility prognosis as
clear evidence demonstrates that being overweight and
having metabolic disorders can affect fertility potential
and obstetrical outcome.
Q: What percentage of your clients has a genetic disease
they hope to avoid passing on to a child? How can RMA
Mexico help them?
A: When we talk about genetics, we have to categorize.
There are chromosomal abnormalities that are associated
with oocyte age. Nature is wise so abnormal embryos will
not usually implant in the womb, a common phenomenon
seen as all women age. There is a second part to genetics,
which are genetic diseases. These are not associated with
age and represent a possibility of carrying and passing
a mutation onto their offspring. Being a silent carrier for
these mutations means that the given disease will never
develop; however, this person can pass on the mutation
to the next generation. If it turns out that the partner is
also a carrier for the same mutation, then the couple will
have a 25 percent chance of having an affected child if
the offspring inherits both mutations. This same couple
will have a 50 percent chance of having carrier offspring
and a 25 percent chance having a mutation-free child.
We use a genetics laboratory in Mount Sinai Medical Center
in New York, capable of detecting 281 autosomal recessive
mutations. We do not obligate our patients to undergo this
testing, although we recommend it, especially if they are
planning to undergo In Vitro Fertilization (IVF) because
through pre-implementation genetic diagnosis (PGD) we can
analyze the embryos and identify those that are not affected
by the analyzed disease.
Around 70 percent of our patients decide to get tested;
around 50-60 percent of patients are carriers of at least
one mutation and approximately 1 percent of couples tested
find out they are carriers of the same mutation. We have
had many patients who seek our services to request PGD
because their naturally conceived child was born with an
autosomal recessive disease. One current patient, whose
baby was born with spinal muscular atrophy, found out they
were both carriers and now are undergoing an IVF cycle
with PGD, precisely to ensure the embryos we transfer are
either noncarriers or only carriers but crucially not affected
by the same mutation. Some of the most common in the
Mexican population are cystic fibrosis, thalassemia, spinal
muscular atrophy and among the Jewish population we
see familial mediterranean fever. However, there is no over-
riding trend as we often see patients test positive for a
variety of extremely rare mutations.
BRINGING HOPE TO THE FIGHT AGAINST GENETIC DISEASES
MARTHA LUNACo-Director of RMA Mexico
VIEW FROM THE TOP
Reproductive Medicine Associates Mexico (RMA Mexico)
is widely recognized as a national and international leader in
state-of-the-art reproductive medicine, led by an integrated
team of doctors and scientists
192
VACCINES AGAINST VIRAL DISEASES: MYTHS AND REALITIES
countries to guarantee public health through prevention
measures, as well as the proper and timely diagnosis and
treatment of patients, epidemiological monitoring for
detection and control of epidemics caused by viruses.
The strategies for the control of viral infections are initiated
with the development of diagnosis methods, design and
preparation of vaccines. Should the virus have an animal
reservoir or be transmitted by vectors, a strategy designed
for vector control is required. All control strategies should
be based on the knowledge of the virus’ structure, the
nature of its genetic material, mechanisms to enter the
organism and replicate within the target cells and the
pathogenesis mechanisms.
For those viral infections that have been present among
the human population for a longer time, such as rubella,
mumps, measles and chickenpox, health systems have
developed not only efficient monitoring systems but also
vaccines to prevent the disease. Vaccination against some
viruses such as polio have been so efficient that the last
poliomyelitis case in the Americas was recorded in 1991.
Vaccines are no more than a biological mix containing
virus' proteins or a virus’ genetic material that allows the
generation of acquired immunity (protection) against a
disease. The first vaccine generated was against smallpox
and used the cowpox virus, a smallpox variant that
generated a slight infection in humans but that could
induce protection against the lethal human smallpox.
The experience of the vaccine against smallpox led to
the generation of other vaccines against diseases such
as rabies, yellow fever, polio, measles, mumps, rubella,
chickenpox, papilloma, hepatitis A, hepatitis B and
influenza. Countries like Mexico entered the 21st century
with a national vaccination scheme of wide coverage that
includes hepatitis A, hepatitis B, poliomyelitis, rotavirus,
measles, rubella, mumps, papilloma and influenza viruses.
Unfortunately, not every country guarantees vaccination
compulsion nor offers them free of charge. This has led
to the continued appearance of a number of preventable
diseases in the population.
Viruses are responsible for a number of diseases that
constitute significant public health problems in Mexico
and in the world. It is easy to pinpoint these infections
as responsible for creating the most harm to humankind
throughout history. Such is the case of smallpox, which
until 1980, the year in which it was eradicated, was one of
the deadliest and most feared viral diseases, according to
the article The Rediscovery of Smallpox. However, there
are a number of other viral diseases, such as poliomyelitis,
that generated thousands of deaths and led to paralysis in
children, or influenza, a viral disease responsible for the 1918
European pandemic that caused a significant decrease in the
continent’s population. More recently, AIDS, which prior to
its identification caused the deaths of thousands of young
people in several parts of the world.
In the past couple of years, new viral infections have captured
the attention of different national and international health
organizations. Such is the case of the ebola outbreak in three
different countries in Africa, the Middle East respiratory
syndrome coronavirus (MERS) and the chikungunya and
zika viruses in the Americas. Without going too far, the zika
virus generated a global health alert, according to the WHO,
due to its association with microcephaly in newborns and
with Guillan-Barré syndrome in adults.
It is important to note that the wide geographic spread of
high pathogenic types of viruses that infect birds, such as
the H5N1 and H7N9 influenza viruses, represent a constant
threat to global public health. In addition, the possibility of
facing new zoonotic events increases due to the accelerated
growth of the world’s population and its expansion. Climate
change, environmental changes and the destruction of the
habitat of several species generate new opportunities for
disease transmission. The prior has led to the creation of
the One Health Concept, in which direct connections are
made between people’s health and the wellbeing of animals
and the environment.
There are a number of viral infections that usually present
themselves in human beings, such as measles, chickenpox,
rubella and papilloma, among others. It is the duty of all
Enrique Villegas Resident in Traumatology and
Orthopedics at ABC Medical Center
Rosa María Del Ángel Chief at the Department of Infectology and Molecular Pathogenesis of CINVESTAV
EXPERT OPINION
193
of recombinant proteins, which only use certain proteins
from a virus to generate immunity. The organism generates
antibodies against the virus’ proteins and is thus protected
against them. These vaccinations are fairly safe because
they do not generate the disease in order to protect the
body from it. An example of this sort of vaccination is that
used against human papillomavirus. DNA vaccines are the
fourth type, in which organisms are immunized through a
DNA sequence that can replicate the virus’ proteins. When
the DNA sequence enters the body, it introduces itself within
certain cells that will generate the viral proteins against which
antibodies will be created. Though this type of vaccinations
is still in an experimental phase, results have been promising.
Unfortunately, there are a number of viral diseases for which
there are no vaccines. This is due to the fact that viruses
have a high mutation rate, which means that whenever a
vaccine is ready for a certain virus, a new variant of the virus
appears and the antibodies created are unable to avoid
the infection of the mutant virus. This has been, among
others, one of the reasons why we still do not have a vaccine
against the AIDS virus, though it has been in the works for
the last three decades.
Although Mexico has done a good job in terms of public health
to battle virus-generated infections, the country still faces
millions of annual cases of respiratory infections different from
influenza, calicivirus gastroenteritis or dengue epidemics. Even
now, the country faces viral infections such as chikungunya
and zika for which no vaccine has been developed. That is the
reason why, within public health budgets, the mortality and
morbidity rates associated with viral infections, continue to be
considerable. We should not let our guard down regarding the
prevention of those diseases that have an available vaccine.
Misinformation can contribute to misguided decisions and
hurt the population most susceptible to being affected by a
serious disease, such as children.
Another aspect that has contributed heavily in the
last years to the appearance of vaccine-preventable
infections has been the misinformation surrounding
vaccines as a leading cause of autism. Even though the
report that once related vaccination with autism has
been totally refuted, as mentioned in the article Safety of
Vaccines used for Routine Immunization of US Children,
a significant number of parents have decided that it is
more natural to permit their children to immunize through
the infection. These decisions have resulted in significant
consequences, such as the presence of measles and
mumps among college students in the US or in children
visiting Disney parks.
Misinformation regarding vaccination can have important
global consequences. If a population is protected with a
vaccine, the virus will not multiply in that specific population
and vaccinated individuals can travel to any part of the
world without the risk of getting sick. Nevertheless, if some
members of the population choose to not vaccinate, there
will be individuals susceptible to the disease, which will
allow the virus to incubate in certain locations. Hence the
importance of not straying from the efforts that have been
made to overcome these diseases.
Vaccines can be of several types. Attenuated vaccines
are made up of live viruses that will not generate serious
infections in human beings but which can help the body
to produce antibodies that will prevent the infection from
occurring. For instance, an attenuated vaccine is the oral
vaccine against polio or yellow fever. A second type of
vaccines is made of deactivated viruses, in which viruses
are treated with chemical compounds that destroy the virus
but not its proteins, allowing for the creation of antibodies
that protect against the virus but that do not cause the
disease. These vaccines are very safe, such as the Salk
vaccine against polio. A third vaccination type is made
Quality analysis of ovules obtained by ovarian puncture to determine which will be implanted via IVF
194
VIEW FROM THE TOP
Q: What are Landsteiner Scientific’s key product lines?
A: Our pipeline includes biotechnological drugs, genomic
medicine, injectables and oral solids. We have several
research lines but the most advanced is related to obesity.
We started phase I clinical trials for this line in Spain,
although phase III will eventually take place in Mexico. We
have recently opened a new platform in genomic medicine
focused on oncology. Landsteiner is starting with colon
cancer, a common disease among men in Mexico and the
US. The company currently has a line of semi-solids such
as creams, a line of injectables and a line of immuno-
suppressants, high-specialty drugs whose production
must be separated from others.
Q: What opportunities does Landsteiner Scientific see in
genomic medicine?
A: Besides Landsteiner, there is no research being done by
Mexican companies in genomic medicine. If we continue
on this path, we could be one of the first to launch a
drug obtained from genomic medicine. There are many
diagnoses and studies in genomic medicine but no
medicines yet. As an example, 23andMe, a genetics lab,
genotypes its clients’ DNA samples and informs them of any
genetic predispositions. For a while, the FDA had banned
the company from doing that because people did not know
what to do with this information.
Q: How can genomic medicine help improve the health
of Mexicans?
A: The genetic information of a population is used to identify
genetic traits that can help either control or cure the prevalent
diseases. Our industry evolved into personalized medicine but
now the discourse has evolved into precision medicine. We
know that some drugs do not work equally well in different
populations. Genomic medicine could show what medicines
work best according to common Mexican genetic traits.
Q: What support does Landsteiner Scientific receive from
academic institutions?
A: We have received support from the Metropolitan
Autonomous University (UAM), the National Institute
of Genomic Medicine (INMEGEN) and UNAM through
the Institute of Biomedical Research. There are only a
few countries where this kind of research is being done,
including Mexico, Spain and the US. Landsteiner’s Spanish
subsidiary GENMED is focused on projects in genomic
medicine in several therapeutic lines.
Q: What kind of medicines are you developing against
colon cancer?
A: When colon cancer develops, there is a metabolic
component that makes colon cells go rogue. Landsteiner
aims to interrupt the signal that orders cells to continue
reproducing, which is possible through genomic medicine.
Once the factors that enable cancer to appear are discovered,
our researchers look for the best place and moment to stop
the cancer from growing. There are two alternatives: one is a
medicine that interrupts the uncontrolled cell-reproduction;
the other creates memory in the human body so that
cancerous cells can be recognized and eliminated regardless
of where they are or whether there is metastasis.
Q: How are your sales distributed among the public and
private sectors?
A: 90 percent of Landsteiner’s sales used to go to the
government, but we started changing that in 2016 by
strengthening our private sales division. Our target is a
70-30 sales ratio.
Q: What is Landsteiner doing to reduce the cost of
medicine and improve access?
A: To achieve this, the company works with generic and
biosimilar medicines. However, to reduce prices and make
access to drugs easier it is necessary to make drug registration
simpler. COFEPRIS has done a great job, yet these normative
changes are difficult to apply and the industry is struggling.
We restructured our medical division because we set the goal
of submitting 15 new medicines for registration per year to
keep our pipeline from becoming obsolete and unprofitable.
INTRODUCING NEW OPPORTUNITIES THROUGH GENOMIC MEDICINEFRANCISCO KURIVice President of Landsteiner Scientific
Landsteiner Scientific is a Mexican pharmaceutical company.
It is focused on the manufacturing, distribution and
commercialization of biotechnological, genomic medicine,
injectables and oral solids. It recently open a plant in Toluca
195
Sanofi is a pharmaceutical group founded in 2004 after the
merger of Sanofi-Sythelabó and Aventis. It is the world’s
third-largest pharmaceutical group and a leader in research in
Mexico with over 35 active studies
Q: As a leader in insulin supply, what innovative solutions
are you developing for diabetes?
A: Sanofi was the first pharmaceutical company to create
glargine insulin, the first analogue insulin that improved
a patient’s quality of life. Recently we launched a new
generation of insulin to redefine control of the disease. It is
a safer insulin because the patient now has a range of up to
36 hours between doses, instead of 24 hours. The solution
is complemented with a platform that provides support
to patients in terms of nutrition, exercise and everything
related to changing habits.
In a wider context, diabetes and obesity might also lead to
other complications that can result in the need for further
treatment, such as knee replacements. For these cases,
we developed an injection that helps delay the need for
a knee replacement. The treatment restores the cartilage,
providing pain relief in the knee and allowing the patient
to continue walking. The cost of knee replacement surgery
is very high and this product, which is already available
through public institutions, helps reduce costs.
Q: What makes Sanofi unique in Mexico?
A: We are a company focused on people, the development
of talent, inclusion, diversity and gender equality. What
makes us different is the human dimension in everything we
do, whether working with patient associations, authorities,
doctors or our own employees. This includes, for example,
helping our employees and their families. Children in Mexico
do not have school on the last Friday of every month, which
can be an issue for parents. We established Kids Office Day,
an initiative in which all our employees can bring their children
to work on that Friday. We organize activities for the children
and in so doing, we help our employees comply with their
parenting responsibilities. So far, we have received a great
response from our employees and their children.
Q: How is Sanofi and its biotechnology addressing Mexico’s
main health concerns?
A: We are redefining treatment for cardiovascular
diseases. Sanofi was the first company in Mexico to
launch a monoclonal antibody for controlling LDLC, a
solution that revolutionized the industry. The monoclonal
antibody inhibits a protein called PCSK9, which hinders
the receptor that clears cholesterol from blood. In Mexico,
cholesterol is a critical topic. The burden of cholesterol
as a cardiovascular risk is due to ethnic features and
unhealthy lifestyles. Usually, diabetic patients have
problems with their lipid levels. Previously, patients were
treated with statins, but eventually they reach a point
where the statin becomes ineffective. This new therapy
provides patients with an alternative.
Q: What role did Mexico play in the development of the
dengue vaccine?
A: Mexico was the first country to register the dengue
vaccine. We are leaders in emerging economies because
we work to meet the specific needs of patients in those
countries. Mexico played a key role in the investigation
of the dengue vaccine because, among the 15 countries
included in the research program, it was one of only two
countries, along with the Philippines, that participated in
the phase I clinical studies. That is why Mexico became
the first country to obtain the sanitary registration: it
was a collaborative approach with the country’s health
institutions that enabled us to establish the necessary
processes to comply with the many strict requirements of
the authorities and to provide them with solid local data. It
was not an easy process but it was also the first time that
COFEPRIS had certified a new vaccine before agencies
such as the FDA and the EMA.
Q: What other vaccines is Sanofi developing?
A: Our global operations are developing research for
a zika vaccine, among others. We have a collaboration
agreement with the US Army to conduct research into this
type of infection and we believe we are in the best position
to achieve a fast and efficient solution for zika after our
experience with the dengue vaccine.
BIOTECHNOLOGY DESIGNED TO MEET LOCAL NEEDS
FÉLIX SCOTTDirector General and Country Chair of Sanofi
VIEW FROM THE TOP
196
ANALYSIS
THE BLACK HOLE OF BLACK MARKET MEDICINE
In Mexico, El Universal reports that between
Jan. 1, 2007 and Dec. 31, 2015, the Attorney
General’s Office seized 945,152 fake medicines,
just under 942,000 of which were seized in
Mexico City. Industry reports on how much
medicine in Mexico is false varies wildly from as little as
4.5 percent of the total to 60 percent. Reasons for the
discrepancy include insufficient controls and the expanse
of the supply chain across borders, where one country’s
health authorities cannot survey operations in the other.
Although some countries have anti-counterfeit measures in
place and are actively seeking and destroying fakes, one of
the main issues in the fight is the lack of global coordination
against this international plague. Countries have yet to
agree on a standardized term to be used and even Big
Pharma companies have an opinion on what should be
included within the definition of illegal medicine. They
insist that counterfeits, which are defined as functioning
copies of a patented drug, be included while NGOs protest
that although violating intellectual property, they pose little
or no health risk. Interpol has several ongoing operations
in the pharmaceutical field, including Operation Pangea,
which targets the online sale of illegal medicines. The
European Council has drafted the MEDICRIME convention,
“a binding international instrument in the criminal law field
on counterfeiting of medical products and similar crimes
involving threats to public health,” according to its website.
As for Mexico, Algaba says that “COFEPRIS is working on
eliminating these health risks by increasing inspections and
visits. It also has an open dialogue with companies to agree
on proper measures for suspending and recalling a product
and also in finding those responsible.”
In some industries, counterfeit products can lead to
financial losses. In the medical sector, it can lead to death.
Fake medicines can be destructive and even devastating
but the lack of global coordination is impeding the fight
against these illicit drugs despite local efforts to curb their
use. In Mexico, trade on the black market is on the rise.
“Counterfeit, altered or contaminated drugs are an
issue several clients of ours have faced recently and the
prevalence of this occurrence is growing in Mexico. There
are several reasons for this, including organized crime,”
says Ernesto Algaba, Partner of the Life Sciences Practice
at Hogan Lovells BSTL.
The issue is neither new, nor particular to Mexico. China’s
state-controlled Shenzhen Evening News newspaper has
reported that in 2001, 192,000 Chinese patients had died
due to the use of fake drugs.
Globally in 2015, there were 3,002 incidences of counterfeit
medicine involving 1,095 pharmaceutical products,
according to the US-based Pharmaceutical Security
Institute. The three categories of drugs most targeted by
counterfeiters are genito-urinary, anti-infectives and CNS.
Cardio-vascular medicines, an important category for
the Mexican population, saw a 29 percent increase in the
number of fakes from 2014 to 2015 and dermatologicals, a
category few think to question, experienced a 57 percent
rise in the same period.
Selling fake medicine is an opportunity for counterfeiters to
make money, but the results for patients can be damaging or
fatal. Mexico has cracked down on this problem in recent years
but issues remain
HIDDEN POISONS IN COUNTERFEIT MEDICATIONS
Heavy metals PoisonsCommon household
itemsDrugs you
did not ask forNo drugs
at all
HiddenIngredients
Mercury, aluminium, lead, cadmium, arsenic, chrome, uranium, strontium, selenium
PCBs, benzopyrenes, rat poison, boric acid, antifreeze
Road paint, wall paint, brick dust, floor wax, sheet rock, paint thinner
Aminotadafil, homosildenafil, xanthoanthrafil, pseudovardenafil, hongdenafil, sibutramine, haloperidol
Dextrose, dextrin, lactose, starch, saline, salt
ImpactCarcinageric or toxic to CNS kidney, liver, skin, bones or teeth
Kidney damage, kidney failure, cancer and developmental defects
Vomiting, abdominal pain, dizziness, blurred vision, respiratory difficulty, nervous system disruption, coma, death
Difficulty breathing, muscle spams, muscle stiffness, high blood pressure, stroke
Harm or death
Source: safemedicines.org
197
Q: What solutions does DSM Sinochem Pharmaceuticals
propose to the growing anti-microbial resistance (AMR)
problem?
A: There is increasing evidence that API manufacturers that
do not adequately treat waste products contribute to the
problem. Releasing high concentrations of antibiotic active
ingredients into the environment creates “reservoirs” of
antibiotic resistant bacteria that can be easily propagated
due to increased global travel. At DSM Sinochem
Pharmaceuticals we strongly believe in producing APIs
in the most responsible and sustainable way. Regulation
concerning wastewater disposal is definitely needed but
its implementation can take several years. In October 2014,
we launched our sustainable antibiotics program, which
initially targeted our in-house wastewater treatment. We
have already implemented basic requirements for clean
and sustainable antibiotics production at all our sites.
These include the use of technology with the lowest
environmental impact throughout our supply chain,
dedicated wastewater treatment plants at every antibiotic
manufacturing site and antimicrobial activity testing.
Q: How are private companies pushing forward on this
issue? What dangers does AMR pose to global health?
A: DSM participated alongside 12 leading biopharma
companies in the generation of the UN General Assembly’s
Roadmap to Combat AMR. The AMR Industry Alliance
was established in May 2017 to review progress on the
commitments made by the Roadmap. This alliance is
chaired by the International Federation of Pharmaceutical
Manufacturers & Associations (IFPMA) and warns that
700,000 people worldwide die from resistant bacteria
annually. Of those, 50,000 die in the US and Europe
alone. Furthermore, 58,000 newborn babies die each year
in India as a result of drug-resistant infections and almost
every minute a child under five dies from pneumonia,
for a total of 410,000, according to the NCDC India. In
the US, two million people contract a serious antibiotic-
resistant infection every year, of which 23,000 will die.
By 2050, over 10 million people will die from resistant
bacteria every year, costing the global economy US$100
trillion per year.
Q: What does Mexico represent for DSM Sinochem
Pharmaceuticals within LATAM and globally?
A: In terms of size, Mexico is our second-largest market in Latin
America after Brazil, followed by Colombia and Argentina.
We truly believe in the strong potential of the Mexican
pharmaceutical industry, as the country is the 11th market for
pharmaceuticals in the world. In addition, it is important to
mention that Mexico is considered a gateway to the rest of
the countries in Latin America and the US due to its location.
Q: What are the main challenges DSM Sinochem
Pharmaceuticals face in the Mexican health sector? How
does it overcome them?
A: DSM Sinochem Pharmaceuticals is the only producer of
antibiotics in Mexico so we are in the spotlight of Mexican
regulators. The sense of urgency in Mexico is entirely
different from that of countries with a larger antibiotics
industry, such as India or China, but the commitment exists
and there is significant debate nationally and regionally
on the regulation of antibiotics. We actively communicate
all information related to AMR to our public and private
stakeholders in Latin America. We know it will be difficult
to solve such a large challenge by ourselves so we are
constantly communicating with the sector. I am proud to
say that the response has been positive so far and we are
glad to be leading such a process in the region because it
ensures that DSM Sinochem Pharmaceuticals will be able
to anticipate any regulatory change in this area.
Q: What products will be game-changers in the next year?
A: We have well-established products in our portfolio
that have been commercialized for a long time. These
products enjoy a stable and steady sales performance.
As part of our corporate business development strategy,
we also expect strong growth in cardiovascular and anti-
fungal product sales.
GLOBAL LEADER IN ANTIBIOTICS PRIORITIZES RESPONSIBILITY
MAARTEN POUWCEO of DSM Sinochem Pharmaceuticals
VIEW FROM THE TOP
DSM Sinochem Pharmaceuticals, founded in 1869, is one of
the oldest fermentation companies in the world. It develops,
produces and sells intermediates, active pharmaceutical
ingredients and drug products
198
Q: What advantages do dental mesenchymal stem cells
(MSC) have over those extracted from bone marrow or
the umbilical cord?
A: Bone marrow contains a small portion of mesenchymal
stem cells and extracting the cells is invasive. They also cannot
be taken from cancer patients because they are already sick,
although milk teeth have cells that can be used to treat direct
family members. The umbilical cord contains hematopoietic
cells, which can only produce blood and not tissue. Those are
useful for certain blood diseases but they cannot be multiplied.
Additionally, hematopoietic cells can only be used in children
under 16 pounds because the procedure requires a certain
number of cells per pound and more cannot be produced.
MSC can convert rapidly into any tissue. We are developing
cardiac cells for regenerative medicine and working with
3-D printing to replace foot bones. In the US, scientists are
3-D printing human hearts and putting them in pigs. We can
make and print skin for burns and we can produce cells for
laboratory tests, thus avoiding animal testing. Additionally,
our experts are developing beta pancreatic cells that
produce insulin, taking steps toward treating T1D.
At the same time, we are trying to help people who suffer
from macular edema and retinitis pigmentosa by producing
cells found in the eye’s rods and cones. From MSC, we can
fabricate fibroblast to produce a serum that helps reduce
wrinkles and our partners in Spain have already treated 20
patients with this product, 18 of which saw positive results.
MSC also have immunomodulating properties, meaning
the cells can reduce inflammation and rejection rates.
We injected MSC into eight paralyzed rats and after six
weeks, four started walking again, which means the neuro-
transmission is perfect. Parkinson’s and Alzheimer’s are
other diseases we want to treat.
Q: What process is used to extract the cells?
A: The ideal process is for children to go to the dentist
when a tooth is loose but not out. If the child waits until
the tooth falls naturally, the mature tooth behind the milk
tooth may have eaten the entire root, from which the
stem cells are extracted. The dentist will put the tooth
in a fluid we provide that will preserve the tooth exactly
as it is. We work with a network of dentists who have
the necessary boxes to preserve the teeth, which can be
preserved for up to four days, although we should receive
it within 24 to 48 hours. We then freeze and expand the
stem cells.
Q: How does current regulation govern the use of stem
cells in Mexico?
A: We cannot use them openly right now because they
are still in trials. We need to apply to COFEPRIS on a
case by case basis, with a specific patient and a specific
treatment in mind. The ethics committee assigned by
the government will then decide if what we are doing is
proper and whether there will be any harmful effects for
the patient. Also, patients can only use their own stored
cells for the treatment. If they want to do something else
we need to repeat the process.
Q: How can regulations be improved to take advantage
of this technology?
A: We know these cells can do a lot of good and regulatory
bodies are trying to move faster regarding regulations.
But this technology develops more quickly than the law,
as evidenced by the fact the FDA is granting permission
today for procedures invented in 1985. Everything in this
field is new and people can be afraid, so we need the
scientific basis to justify new techniques.
The government asks us for advice on how to handle new
cases. It is remarkable that COFEPRIS is recognizing the
need for support in areas it is unfamiliar with and that
they are willing to integrate this support. Social security
is also burdened because of the money required for long-
term treatments. We want patients to have access to
these opportunities as soon as possible.
PROMISE OF MSC LIES IN FLEXIBILITYABRAHAM FRANKLINDirector General of Grupo Franklin
VIEW FROM THE TOP
Grupo Franklin operates in diverse sectors, including health. It
owns a chain of dental clinics, a stem cell bank and a research
center, distributes medical equipment and runs a biohazard
waste disposal company
199
Q: What led you to use stem cells to treat injuries?
A: We decided to research and develop stem cell treatments
after performing a heart transplant 16 years ago in San
Javier Hospital, Guadalajara. The process was extremely
complex and expensive both for the doctor and for the
patient, who ran out of money after a month in recovery.
This motivated us to look for an alternative solution that
could help patients with a certain level of heart failure avoid
the need for a transplant. We researched the role of stem
cells in cardiac failure and we allied ourselves with groups
that were already investigating it. This research led us to
develop a comprehensive approach to treating heart failure
that involved the injection of stem cells and significant
changes in the patient’s habits and diet. Afterward, we
started researching the impact of stem cells in spinal, joint
and muscular injuries.
Q: How do you extract the cells?
A: We extract the stem cells from the patient’s iliac crest
bone marrow. These cells are purified and cultivated. They
are then implanted in the damaged tissue or wherever there
is a mobility problem. While umbilical cord cells can also be
used for these purposes, COFEPRIS only authorizes us to
use stem cells from a patient’s bone marrow. These are also
much easier to obtain and equally good for our purposes
as cells from the umbilical cord. Cells from teeth can also
be used but they require more purification and cultivation
because they are in shorter supply than bone marrow cells.
After cultivation, we isolate mononuclear stem cells, which
are implanted in tissues including the heart, lungs and
other damaged areas autologously. We are planning to
store these cells to create a bank. We will also isolate
mesenchyme cells, which can be implanted in any
individual because they have no antigenic receptors.
During the replication processes, it is necessary to
closely monitor samples to ensure cells do not deteriorate
or mutate, which could lead to tumors. We have been
developing these projects for over eight years as the
generation of research protocols entails a long process.
Our goal is not just to store the cells but to study their
applications and curative potential. There are many studies
due on the efficacy and applications of these therapies
that could define which cases can use such applications.
Q: What are the short and long-term goals for Biostem
Technologies?
A: We have a team comprised of certified researchers from
Guadalajara studying how many changes can be performed
before a cell is damaged and monitoring existing cultures
for signs of damage. Our goal is to generate a cell bank,
which will include adult autologous and mesenchyme cells
for anyone who may need them. This bank is already in
progress and now we are fulfilling the requirements for
regulatory data so the bank can be approved by COFEPRIS.
To get the approval, all hospital and laboratory infrastructure
has to be certified by the council. We have been developing
these projects for over eight years because generating
research protocols is a long process.
Our goal is not just to store the cells but to study their
applications and potential to cure diseases. There are many
studies to be made on the efficiency and applications of
these treatments and that could indicate which specific
patients could benefit. We have a research laboratory in
Miami but our ultimate goal is to create one in Mexico.
Q: Which new products are you developing?
A: In 2017, we will branch into different areas. Our goal
will be to generate wellness products including food
supplements, which contain omega-3 and other nutrients
and pure water. We are also developing nutraceuticals
targeting patients who suffer from obesity and diabetes. We
are looking at developing products that can neutralize the
negative effects of inflammation, which could help patients
with autoimmune diseases such as lupus and scleroderma.
Mononuclear stem cells and mesenchyme cells can also be
used as anti-inflammatory agents.
EXPENSIVE PROCEDURES SPUR STEM CELL INNOVATION
JESÚS ESPARRAGOZADirector of Biostem Technologies Mexico
VIEW FROM THE TOP
Biostem Technologies focuses on research and development
of stem cell therapies for Mexico, a pharmaceutical line that
provides high-quality products and a wellness line focused on
anti-aging and rejuvenation products and services
200
Q: What are the advantages of using dental stem cells over
those of the umbilical cord or bone marrow?
A: The cells from the umbilical are hematopoietic and they
are mainly used to treat blood conditions such as lymphoma,
leukemia and anemia. Dental stem cells are mesenchymal;
they form tissue and can differentiate into bone, cartilage,
heart, liver, etc. The other fundamental difference is that
umbilical cord cells cannot be multiplied and often there are
not enough cells for treatment. Mesenchymal cells can be
used several times for different applications. Finally, there
is only one opportunity to collect umbilical cord stem cells
but there are many opportunities to obtain cells from teeth.
Bone marrow is a rich source of both mesenchymal and
hematopoietic cells. Their collection is much more painful
as a thick needle is inserted into the bone several times.
It is invasive and hospitalization is required. In addition,
the cell quality is not as good because they are prone to
environmental damage. This is a good option for those who
have not persevered cells in another form.
Q: T2D is affecting Mexico and consuming the public health
budget. How can stem cell research help?
A: Many auto-immune diseases are inflammatory, so stem
cells can help with their anti-inflammatory properties. In
addition to becoming tissue, over the past five years it has
been discovered that stem cells have additional properties:
anti-bacterial, anti-inflammatory and regenerative. They
also recruit other cells to help with repair and protect cells
by stopping apoptotic processes, which is programmed
cell death. Stem cells are also immune-regulating. These
are environmentally responsive therapeutics. Applied
intravenously, these cells will do what you need them to.
As for T2D, the immune regulating aspect helps because it
is an auto-immune disease; the anti-inflammatory function
helps with the inflamed pancreas and the regenerative
element helps to regenerate pancreatic function. For the
best outcome when treating chronic diabetes, several
sessions are advisable for the cells to work. In addition to
pancreatic malfunctioning, T2D causes a great number of
problems such as blurred vision, glaucoma, poor circulation
in the extremities and liver, kidney and heart issues. There
is a protocol in Monterrey under research that is aggressive
but efficient, which involves submitting the patient to
chemotherapy to destroy their immune system because it
has been attacking itself. After it is killed off the patient is
given a new immune system with stem cells. This is done with
hematopoietic cells collected from bone marrow. This is also
helping allogenic transplants achieve lower rejection rates.
Q: Although authorization is granted on a case by case
basis, what are the main uses of stem cells in Mexico?
A: The potential applications are still being researched. In
Mexico, they have mostly been used for orthopedics, lesions in
articulations such as the knee, hip and shoulder or for diabetes.
We are running an interesting protocol on autism and stem
cells also can be used for neuro-degenerative diseases such
as Parkinson’s disease. There are also intravenous applications
to help regenerate tissues and cells. Stem cells have anti-aging
properties that are popular with athletes.
Q: What regulations are stem cell clinics like Bioeden
lobbying for in Mexico?
A: Processes are limited by the laws that are 10-15 years
old and policymakers are slow to react to innovation.
Mexico is a pioneer in this area so there are fewer countries
to copy from and thus more fear, which is normal. This
can be solved by reading scientific information which is
available for all, and there are many aspects that have
already been tried and tested. It is a waste of time and
money to repeat those tests here, since that money
could be used for further research. Regulation of dental
stem cells in particular is scarce and mesenchymal cell
regulation is tied to that of hematopoietic cells. COFEPRIS
is conscious of these things and is moving forward. We
are not completely blocked by legislation. I hope there
will be greater openness in the next two years.
STEM CELLS DO WHAT YOU NEED THEM TO DOVICTOR SAADIACEO and Founder of Bioeden Mexico and LATAM and CCO of Bioeden USA
VIEW FROM THE TOP
Bioeden, a US-based tooth stem cell bank, collects and stores
dental stem cells using cryopreservation. It is present in 30
countries and has three laboratories: one in the US, one in the
UK and another in Thailand
201
Practice at Hogan Lovells BSTL. “[…]Key
provisions will need to be amended to provide
guarantees products are safe for human
consumption. I do not think we have the detailed
provisions that may exist in other jurisdictions,”
he says, adding that “the regulatory framework needs to
take best practices from other jurisdictions into account. We
know that in Europe and in the US there are more specific
provisions and limitations. Fortunately, products are mainly
coming from these jurisdictions into Mexico. Even though
we have complex labeling requirements, this is an area that
could potentially be improved.”
By 2015, over half of the world’s countries did not have
relevant antibiotic legislation. Ensuring food chain security is
vital for human health. Over 60 percent of human pathogens
are of animal origin and over 20 percent of animal losses
are caused by disease. In addition, the OIE reports that five
new human diseases are reported every year. For this reason,
maintaining animal health is a vital public health issue.
“We also need a more developed legal framework regarding
organic products or those free of antibiotics. We need to
know if the animal consumed the legal amount of antibiotics
or if it is completely drug-free. General regulations in food
products need to be connected with organic food and animal
antibiotic consumption requirements. Ensuring the quality
of meat containing antibiotics and the effects of that meat
on humans is vital,” says Cecilia Stahlhut, Senior Associate of
the Life Sciences Practice at Hogan Lovells BSTL.
Because bacteria develop resistance so quickly, there
is little incentive for pharmaceuticals to search for
new antibiotics. McKenna says that a new generation
of bacteria develops every 20 minutes, whereas drugs
take years to develop. She calls for more incentives for
pharmaceuticals to continue the fight.
THE RISE OF THE SUPERBUG
Before antibiotics were accidentally discovered by Sir
Alexander Flemming in 1945, an infection of a small cut
could kill. For the past 70 years, the discovery of an
increasing number of antibiotics has prevented millions of
deaths but this is under threat. Resistance or immunity to
antibiotics, known as antimicrobial resistance, is emerging
and such resistant bacteria are known as “superbugs.”
How superbugs developed is simple to understand. In
the words of CDC researcher and superbug expert Maryn
McKenna: “Bacteria compete against each other for
resources, for food, by manufacturing lethal compounds
that they direct against each other. Other bacteria evolve
defenses against that chemical attack. When we first made
antibiotics, we took those compounds into the lab and
made our own versions of them and bacteria responded
to our attack the way they always had.”
The Review on Antimicrobial Resistance, funded by the British
government, pegs the annual death toll caused by infections
no drug can help at 700,000. It estimates that this number
will rise to 10 million by 2050 if no action is taken. The WHO
estimates that every year 480,000 people are infected with
multi-drug resistant tuberculosis. Extensively drug-resistant
tuberculosis had been detected in 117 countries by the end
of 2015, including Mexico, and it kills 50-70 percent of those
infected. The global health body also says that between 2000
and 2015, 49 million lives were saved due to diagnosis and
treatment of tuberculosis, which consists of four antibiotics.
The use and prescription of antibiotics for humans is
heavily regulated. In Mexico consumers cannot purchase
antibiotics without a prescription, which is kept by the
issuer. However, the CDC estimates that upto 50 percent
of antibiotics prescribed for people and most of those
used in animals are unnecessary or not as optimally
effective as prescribed. Unfortunately, the CDC also
estimates that “1 in 5 resistant infections are caused by
germs in food or animals”. “COFEPRIS tightly controls
the human consumption of antibiotics but animal meat is
the greatest source of antibiotics for humans,” says Felipe
Espinosa, CEO of Laboratorios Collins.
In Mexico, tighter regulations that take their cue from other
countries could help limit the impact from a contaminated
food chain, says Ernesto Algaba, Partner of the Life Sciences
ANALYSIS
Antibiotics have saved many lives over the past 70 years
but the rise of the “superbug” threatens this. Bacteria
is developing resistance to antibiotics, leaving experts
scrambling for a new solution
ANTIBIOTIC RESISTANCE TIMELINE
DISCOVERY RESISTANCE IDENTIFIED
Penicillin 1943
1945 (2 years)
Vancomycin 1972
Imipenem 1985 1988 (16 years)
1998 (13 years)
Daptomycin 2003 2004 (1 year)
Source: Maryn McKenna TED 2015
203
Wellness is the key to prevention, which is vital for lowering the chronic
disease burden in Mexico and improving the general health of the population.
Improving healthy eating habits can make an enormous difference to health
and to the amount spent on health matters. This is nowhere more relevant
than Mexico, which holds one of the top spots worldwide for both adult
and child overweight and obesity. With Mexican nutrition being largely
insufficient, companies are capitalizing on this opportunity to provide vitamin
supplements or complements to the market. With the trend of eating healthy
comes the trend of avoiding chemical medicine, leading to a resurgence in
natural remedies or herbal medicine. Although COFEPRIS has cracked down
on these sectors in recent years to guarantee the safety of patients, it is now
emerging as a viable alternative for public institutions with budgets bursting
at the seams. People are also increasingly turning to dermatological and
surgical solutions to meet their aesthetic needs.
This chapter will provide insight into the national wellness market and how it is
looking to develop. It will feature companies devoted to improving nutrition,
innovative skin care products and fitness alternatives that best meet Mexican needs.
NUTRITION & WELLNESS
9
205
CHAPTER 9: NUTRITION & WELLNESS
206 ANALYSIS: Change of Habit Required for Wellness
209 VIEW FROM THE TOP: Javier Luna, Nestlé
210 VIEW FROM THE TOP: Raúl Camarena, Aspen Labs
211 VIEW FROM THE TOP: Víctor Anaya, Merz Pharma
212 INSIGHT: Geraldine Waked, Sesderma
213 VIEW FROM THE TOP: Alejandro López, IM Natural
214 VIEW FROM THE TOP: Adriana Azuara, Agave Spa
215 VIEW FROM THE TOP: Ricardo Spínola, Farmapiel
216 VIEW FROM THE TOP: Cédric Ertlé, Expanscience
217 VIEW FROM THE TOP: Fabián Bifaretti, Sports World
218 VIEW FROM THE TOP: Miguel Marín, Industrias Sintoquim
220 INSIGHT: Ignacio Luna, Biofarma
221 ROUNDTABLE: What Factors Impede Skin Care and What are Some Protective Measures?
206
CHANGE OF HABIT REQUIRED FOR WELLNESS
trend toward healthy eating also often avoid
chemical medicines, leading to a resurgence
of natural remedies and herbal products.
Although COFEPRIS has cracked down on
these sectors in recent years to guarantee
the safety of patients, it is now emerging as a viable
alternative for public institutions with budgets bursting
at the seams.
The OECD reports that in 2012 over 71 percent of the
Mexican population was either overweight or obese.
It also reports that in 2013 Mexicans were consuming
3,072 kilocalories per capita per day. “Behavioral change
is the key to reducing the disease burden of obesity and
diabetes, the leading cause of disease and healthcare
spending,” says Paul Doulton, Founder and Managing
Partner of Oriundo, a consultancy composed of former
CEOs that helps new entrants to Latin American
pharmaceutical markets.
Obesity is a risk factor for T2D, which in turn is caused
partly by poor nutrition. Maintaining healthy eating habits
can make an enormous difference to health and to the
amount of money spent on health matters.
“ENSAUT 2016 was representative of how people see
themselves versus how they are. The health side is more
complicated, as often people do not feel ill. By posing
overweight and obesity solely as a health problem,
people do not identify with this. We have therefore
Maintaining general wellness is the key to prevention,
a vital issue for lowering the chronic disease burden
in Mexico and improving the general health of the
population. Accordingly, improving eating habits can
make an enormous difference to health and to public
expenditures. This is increasingly relevant than Mexico,
which holds one of the top spots worldwide for both
adult and child overweight and obesity.
“Overweight and obesity in children is more serious
than these issues in the general population. However,
children suffering from these problems almost certainly
will continue to do so in adulthood. Childhood overweight
and obesity are also more difficult to solve. They are still
growing, so restricting nutrition is not as simple as in
adults,” says Carlos López, Director General of Medix, a
company dedicated to fighting overweight and obesity
since 1940.
The 2016 ENSANUT report shows that Mexicans are not
only overweight, they are unaware of it and do not know
correct alimentation or exercise requirements. With
Mexican nutrition being largely insufficient, companies
are capitalizing on this opportunity to provide the market
with vitamin supplements or complements. Those who
ANALYSIS
Nutrition and exercise are key to fighting overweight and
obesity, conditions prevalent in Mexico. However, most
patients see this as an aesthetic issue, not a health problem,
in the same way as they view skincare
ADULTS OVER 20 THAT CONSUME EACH FOOD GROUP DAILY IN MEXICO (percent)
Source: ENSANUT 2016
Sw
eete
ned
dai
ry d
rink
s
Sw
eete
ned
non-
dai
ry d
rink
s
Sw
eet
cere
als
Sna
cks,
sw
eets
and
des
erts
Fas
t-fo
od
and
mex
ican
sna
cks
Pro
cess
ed m
eats
Dai
ry
Eg
gs
Wat
er
No
n-p
roce
ssed
mea
t
Pul
ses
Veg
etab
les
Fru
it
0
20
40
60
80
100
PERCENTAGE OF ADULTS OVER 20 THAT CONSUME EACH FOOD GROUP
� Rural � Urban
207
taken a different approach, focusing on aesthetics and
wellbeing. We ask patients if they would like to change
their image,” says López.
Another area of health often associated with aesthetics
is dermatology. A person’s skin condition is also greatly
impacted by the food consumed and is an external show
of wellbeing. With many Mexican cities plagued with high
levels of pollution, protection from such external damage
is vital. A 2015 MicroMarketMonitor report pegs Mexico
as the fastest growing country in the North American
dermatology devices market with a compound annual
growth rate of 9.8 percent from 2014 to 2019.
“People need to protect their skin against pollution, even
indoors where it can sometimes be more polluted because
people are crowded into a room or working long hours
under artificial lighting, among other factors. It is necessary
to use anti-oxidants to protect the skin against this,” says
Adriana Azuara, CEO of All4Spas and Agave Spa.
Another major wellness factor is physical fitness, vital
for keeping obesity in check. “Gyms are able to link
sedentary people with a more active life, not only through
strength and cardio equipment but with a robust wellness
orientation that includes group classes, meditation, yoga,
Pilates, steam rooms, saunas, massage services, nutrition
experts, facilities for kids (and) swimming pools,” says
Fabián Bifaretti, CEO of Sports World.
El Financiero reports that there are 1.9 sports clubs in
Mexico per 100,000 inhabitants, compared to 8.8 in Brazil
and 12.4 in Argentina. However, experts argue that there
is no access issue to physical fitness because, although
top-end gyms are few and out of the average Mexican’s
LIFE EXPECTANCY AT BIRTH (years)
—US —Mexico —Japan —Colombia —China —Chile —Brazil
Source: OECD
price range, walking and running in the street is free.
In addition, many state ministries of health have been
implementing free outdoor gyms in cities, although their
use is not recommended when pollution levels reach
excessive heights.
Despite these issues, life expectancy in Mexico has increased
steadily in recent years, reaching an average of 75 years in
2016, 72.3 years for men or 77.7 years for women.
70
75
80
85
2015201420132012201120102009200820072006
Source: aire.cdmx.gob.mx
Leve
l
Ult
ra-v
iole
t in
dex
According to skin type, the maximum time of exposure, without protection, should be (in minutes)
Very pale
PaleLight brown
Dark brown
Dark Very dark
1 112 140 175 219 274 342
2 56 70 88 109 137 171
3 37 47 58 73 92 144
4 28 35 44 55 68 86
5 22 28 35 44 55 68
6 19 23 29 37 47 57
7 16 20 25 31 39 49
8 14 18 22 27 34 42
9 12 16 19 24 30 38
10 11 14 18 22 27 34
11 10 13 16 20 25 31
12 9 12 15 18 23 29
13 9 11 14 17 21 26
14 8 10 13 16 20 24
15 8 9 12 15 18 23
Low
Mod
erat
eH
igh
Ver
y hi
ghEx
trem
ely
high
209
DIFFERENT ISSUES REQUIRE DIFFERENT APPROACHES
JAVIER LUNASenior Manager in Health Nutrition and Wellness at Nestlé Mexico
VIEW FROM THE TOP
Nestlé is a leading nutrition, health and wellness company present
in more than 197 markets with around 2,000 brands. Nestlé also
executes local philanthropic and awareness campaigns in Mexico
to battle the main nutrition problems in the country
Q: What are the main nutritional issues in Mexico and how
is Nestlé approaching these?
A: Our research has highlighted several issues in Mexico.
We have conducted a series of studies we developed
(Kids Nutrition and Health Study and Feeding Infants and
Toddlers Study) and we have performed R&D with our
partners at Nestlé Research Center in North Carolina,
and Nestlé Mexico has worked with different national
research institutes, such as the Public Health Institute
(INSP). The first study relates to hydration among
children. They consume a large quantity of sugary drinks
but lack regular water intake. Second, in Mexico around
17 percent of children and teenagers skip breakfast every
day, which is very serious in nutritional terms. Many of
those who do have this meal eat sugary bread in addition
to sweetened beverages, while the intake of grains is
very low. Finally, a third trend is a shortage of fruit and
vegetables in infant diets.
To battle these issues, we have established different
approaches. Nestlé has pledged to reduce ingredients
such as sugar and salt in all its products globally.
Locally, we have different action plans. Among these
there is a program called Portion Guidance, which
includes suggested portions in a product’s label.
Another campaign related to our water lines promotes
water consumption and we have also been improving
our cereal brands (no artificial flavors, whole grains as
a first ingredient and reduced sugar). Mexico Gerber
has reformulated its infant cereals to eliminate added
sugar. Gerber has also launched a new organic product of
fruits and vegetables for babies and preschoolers that is
presented in pouches. Regarding all the diabetes issues in
the country, in 2017 we will launch a new line of products
under the Boost brand called Boost Glucose Control. This
product specializes in nutrition for diabetics.
Q: What new technology are you pursuing in children’s
nutrition?
A: Infant nutrition is a constant topic for our research
budget and we are now focused on low-protein infant
formulas in response to excess protein intake around the
world, which is known to cause illness, especially in infants.
Through our process called OPTIPRO, we are trying to
make the milk we use for our infant formula as close as
possible to breast milk, which will make it easier to digest.
Q: How are Nestlé’s programs encouraging healthy eating
habits in Mexico?
A: Nestlé has reorganized its business vision to focus on
three areas: the person and the family, the community
and the planet. In the first category, the goal of our full
portfolio is to provide better nutrition and nutritional
options for consumers. Toward that goal, we also have
three philanthropic programs: United for Healthier Kids,
Healthy Kids and Start Healthy, Stay Healthy. These three
programs promote nutritional orientation, the prevention
of child obesity and healthy pregnancy and baby health.
The second category includes: Cocoa Plan, Nescafé Plan
and Dairy Commitment to ensure a stronger value chain
and to help local agricultural entities become certified
providers for Nestlé. Finally, for the planet, Nestlé has
made a water-usage pledge and implemented a waste-
reduction initiative. In Mexico we even have one factory
that operates with zero water.
Q: How important is Mexico to Nestlé’s global operations?
How much of your manufacturing is done here?
A: Mexico is an important location. Within Nestlé’s global
operations, in terms of sales, it is ranked seventh generally
and number three worldwide for infant nutrition. Nestlé
also has 17 factories in the country. In 2016, we opened our
infant nutrition factory called Nantli with an investment of
more than US$245 million. This factory will supply markets
in Mexico, Latin America and Asia. In 2013, Nestlé Mexico
exported more than 86 tons of locally manufactured
products to 29 countries and imported more than 29 tons
from 14 countries.
210
Q: What products did Aspen Labs launch in 2016 to
address the needs of the Mexican population?
A: In the nutrition segment, we launched our Infacare formula,
which complies with all requirements established by the
WHO. Our installed capacity at Aspen Labs’ Vallejo plant
in Mexico City gives us the ability to offer this product at a
competitive price compared to what is traditionally available
in the Mexican market. Our product is superior in quality to
the dominant market equivalent and costs 10 percent less
than that of our competitors. For those that require an infant
formula, it is a great advantage to have a product that is not
only accessible but of the best quality and efficacy.
Q: Is this formula designed for both healthy babies and
those with complications?
A: This product would be suitable for healthy babies
who require formula because their mothers cannot
breastfeed, for example. Infacare is part of a portfolio
that we acquired in 2013. Infacare 1 is for babies aged
0-6 months, Infacare 2 for those aged 6-12 months and
Infacare 3 for those over 12 months. We have another line
for children who have a medical complication. However,
we always emphasize the importance of breastfeeding
as part of our core values and principles.
Mexico has made great advances in promoting maternal
milk, which we support. A few years ago, for example,
mothers had to take their maternity leave 45 days before
the birth of the baby and return to work 45 days after. In
2016, the labor law was changed and now a mother can
take her leave from the day before giving birth and up to
90 days after. This encourages mothers to breastfeed, to
be closer to and spend more time with the baby. To give
mothers even more time with their babies and to deal
with any situation that might arise, Aspen Labs provides
its employees an extra 30 days maternity leave.
Q: What are the main issues in infant nutrition in Mexico?
A: The main issue with babies is undernutrition or
malnutrition, which becomes obesity later in childhood
and which is a major problem. There are also allergy
issues that present during the lactation period and as
babies begin to consume solid food such as mash or
juices. Mexican families quickly acclimatize babies to the
family diet, which causes serious obesity problems. The
health system ends up dealing with the fallout from that.
Q: To what extent do you carry out R&D in Mexico for
specific formulas and conditions?
A: We launched a significant project in the second half
of 2017 to develop a new formula that addresses the
needs of Mexican babies and toddlers. The project is
being developed with renowned players in the public and
private sectors that are dedicated to this matter.
Q: What factors are driving growth in your infant nutrition
sector and what are your expectations for 2017?
A: We saw significant growth in our nutritional segment
due to the fact that, for the first time in many years, we won
a public tender to provide nutrition for babies aged 0-6
months and 6-12 months. This broke paradigms because for
20 years the tender had been won exclusively by one firm.
Our milk sales are not growing in the private sector due
to complicated market conditions, although we hope that
the launch of the new versions of Infacare will help us
resume growth in this sphere in 2017.
BABY FORMULA: THE CASH COW OF NUTRITIONRAÚL CAMARENAGeneral Manager of Aspen Labs Mexico
VIEW FROM THE TOP
Aspen Labs is a South African pharmaceutical company, the
largest listed on the Johannesburg Stock Exchange. Present in
over 150 countries, it specializes in OTCs, infant nutrition, male
and female health and cardiology
Labor law changes in 2016 allow
mothers to take maternity leave
from the day before giving birth and up
to 90 days after
211
Mexican market. We acquired a patch in 2016 that helps
remove tattoos quickly and with fewer inconveniences for
patients and doctors. The process for removing a tattoo
is long, painful and requires many sessions but this patch
reduces the time, pain and number of sessions. This is one
of the areas we are entering.
Q: What possibilities are there for Mexican and Latin
American companies to benefit from the Merz Corporate
Venture Capital Initiative?
A: We are incentivized to look for new opportunities
for development, not only globally but also locally. We
are working with a local company that may become an
opportunity for Mexico and, if it works, we will later make
it a global opportunity. Our company invests through the
venture capital fund and through other channels as the
Merz family has different businesses.
Q: What is Merz’s strategy for growth in Mexico?
A: We believe we still have great organic growth potential.
The aesthetics market in Mexico is just starting to develop.
The country’s economic situation has slowed the aesthetic
market down a little, but we believe that growth will resume.
We are interested in growing through new products and
offering new options to patients. This represents a great
opportunity as we have several product lines in aesthetics
in the US and in Europe that are not yet available in Mexico
and that would be attractive to the Mexican consumer.
Q: What are Merz Mexico’s plans for 2017?
A: The deceleration of the Mexican economy has created
a greater challenge to continue growing at the same rate.
During 2017 we want to continue bringing new options to
doctors and patients and to see growth in the markets in
which we already participate.
Merz Pharma is an international pharmaceutical company
focused on aesthetic medicine and neurotoxin solutions. Its
main therapeutic areas are medical dermatology, liver diseases,
Parkinson’s and Alzheimer’s
AESTHETICS TO OVERCOME ECONOMIC DOWNTURN
VÍCTOR ANAYACEO of Merz Pharma
VIEW FROM THE TOP
Q: Merz Pharma enjoyed 13.2 percent revenue growth in
Latin America in 2015-2016. How important is Mexico to
Merz’s regional strategy?
A: Mexico is Merz’s most important market in Latin
America and the fourth most important worldwide.
Latin America is a young region for us: our Argentinian
subsidiary was opened in 2016 and our Colombian and
Brazilian units just before that. Merz’s financial year
runs from July to June, so the 13.2 percent growth is for
the second half of 2015 and the first half of 2016. Our
aesthetics division saw the most growth in this period.
Globally, the company is focusing on the aesthetics and
neurotoxins markets. The rest of our portfolio consists of
what we call regional products.
Q: What is Merz Pharma’s strategy to expand its portfolio?
A: Merz Pharma invests part of its profit annually in R&D,
mostly in aesthetic medicine but also in research on
neurotoxins, an important element in the study of the
nervous system. Merz is working to find new applications
for this compound. The company is also expanding its
portfolio through strategic acquisitions such as Ulthera, a
medical devices company that develops applications for a
therapeutic ultrasound platform technology, and Anteis, a
manufacturer of biomedical products. In 2016, we closed
the purchase of ON Light Sciences, a US company.
Q: What solutions does Merz Pharma offer in the area of
personalized medicine?
A: Our personalized solutions involve neurotoxins and
have specific medical uses, with applications in spasticity,
dystonia and blepharospasm. We have also published
the results of an important clinical study called Tower.
These results show that Xeomeen, our toxin, can provide
personalized options for patients, allowing doctors to adapt
treatments to each specific patient, including higher doses
and different intervals. The toxin is available on the National
Formulary and through the private market.
Q: Which aesthetics products will be introduced to Mexico?
A: We have an extensive global line and we are analyzing
options to see which can be adapted to the needs of the
212
INSIGHT
September 2016 shows the extent of air pollution globally: 92
percent of the world’s cities breathe polluted air, and so does
much of Mexico with the worst rates seen in Monterrey, Toluca
and Salamanca, according to a WHO 2016 report.
The male population is another segment that is often
overlooked, Waked says. “Men are beginning to use solar
protection more and more,” says Waked, explaining that
men suffer from the same skin diseases and conditions as
women, although skincare is mostly perceived as a female
market. “Publicity is always focused on women, but really, the
purchasing level is similar between men and women,” she says.
The Mexican Society of Oncology (SMeO) reports that
the number of malignant melanomas doubles every
decade and that 5-10 percent of skin-cancer patients
have a family history of the disease. “Skin cancer is the
worst skin affliction. It is becoming increasingly common,
especially in Mexico,” says Waked. One of the main issues
faced in Mexico is the lack of awareness around skin
protection. Many people do not wear sun screen, even
though Mexico City sees an average of 200-270 hours
of sun per month. “The dermatology industry’s eyes are
set on Mexico as the country with the most potential in
Latin America,” says Waked.
Skin diseases are varied and although skin-care advertising
often targets women, men and particularly children are
vulnerable groups that are often overlooked. “We need to
learn to have healthy eating habits but also to keep our
skin healthy. Skin cancer is not an adult disease,” says
Geraldine Waked, Director General of Sesderma, a Spanish
dermatology laboratory founded in 1989.
“We have to raise awareness among the population and
among mothers that they should not send children to school
without sun protection,” Waked says. She points out that 100
percent cloud coverage only blocks 20 percent of UV rays.
Also, SPF only blocks UVB rays, responsible for sunburn, but
not UVA rays, responsible for premature aging and cancer. In
addition, these rays are stronger at higher elevations, a factor
to be considered in mountainous Mexico that sits at a mean
elevation of 1,111m. Add in pollution that is prevalent in cities like
the country’s capital and there is a double threat to children’s
health. “Children in cities like Mexico City often are not taught
about pollution and even when an emergency contingency is
in place, there is never talk of protection,” Waked adds. The
WHO notes that children are more at risk of suffering from
side-effects of air pollution due to the immaturity of their
respiratory organs, and that those in middle-income countries
are among those most impacted. A map the WHO released in
BE AWARE: SKIN CARE NOT JUST FOR WOMENGERALDINE WAKEDDirector General of Sesderma
213
Q: What are your distribution channels?
A: We have two levels of self-service partners in Mexico:
regional, such as Casa Ley in Sinaloa and Operadora
Futurama in Chihuahua, and national, such as Walmart,
Chedraui, Soriana, H-E-B, Farmacias Guadalajara and
Farmacias Benavides. We started in naturist retailers and the
market pulled us toward new distribution channels. IM Natural
then started exporting, assembling for foreign companies,
licensing its products and finally developing private labels
for national companies such as ISSSTE-marts, Farmacias
Benavides and Almacenes García.
Q: How would you describe IM Natural’s success in entering
foreign markets?
A: We have had mixed results. IM Natural exports its
products and also negotiates licensing representations and
manufactures for foreign companies. The company has
entered new foreign markets thanks to our distributors and
the support of ProMéxico. We have exported our products to
Europe and South America and recently we started selling our
products in the US, performing especially well in states with
a high concentration of Latinos, such as California, Texas and
Illinois. IM Natural is negotiating with new distributors such
as Walmart, CVS and Walgreen’s to enter other markets but
these processes are lengthy.
The company has faced various levels of market openness in
countries that recognize COFEPRIS. For example, we have
already entered Colombia. Argentina is more difficult but
easier than Chile, while Brazil is virtually impossible. In other
markets such as Peru and Ecuador, IM Natural is deciding
whether to export or produce for local companies. The
company has received sanitary registrations in Bolivia to
produce mascara. IM Natural produces for a Mexican-owned
company in Australia and we are about to grow its cosmetics
line with new creams and facial products.
IM Natural has been focused on the naturist segment and
cosmetics industry since its foundation in 1989. This company
uses natural colors and pigments and has never tested on
animals. It promotes environmental protection
Q: What is IM Natural doing to accomplish its expectations
for 11 percent growth in the cosmetics industry by 2019?
A: The company is changing its internal structures so it
can procure the necessary merchandise to supply national
demand. Competition is also growing daily, so we update
all our resources constantly because the Mexican cosmetics
market can be unpredictable. Although trends may vary on a
daily, weekly and monthly basis, in general when the economy
contracts it is reflected in lower demand but sometimes the
market does the contrary and our main customers place
bigger purchasing orders than usual. We must be wary of
transnational companies noticing this bipolarity. L’Oréal, for
example, whose products are meant for a wealthy, high-
income market, may notice that our products, destined for
the middle and lower-income segments, have higher demand
strength in terms of volume and bulk, so it turns its focus
to our market. Those companies retain their prestigious and
high-end market while also producing products to compete
with midlevel companies.
Q: What is your focus in terms of internal corporate changes?
A: The goal of these corporate changes is to enhance
efficiencies in product delivery, quality, replenishing delivery
reach and general operational effectiveness. This internal re-
engineering entails a commercial re-engineering.
IM Natural is a traditional company known for its mamey seed
oil mascara. However, we sell a great variety of eye mascaras
made of different ingredients, which provide different
benefits and different presentations. We also have a wide
range of face creams and lotions that will be affected by the
re-engineering of our operations. We are changing the image
of our face creams, creating new creams and formulating
new lotions. IM Natural is known for using a variety of natural
ingredients like chamomile, snail slime, argan and marrow
in its cosmetics. This company was the first to use mamey
seed oil, which enhances eyelash growth, and traditionally
employs national ingredients. It is important for some of
our customers that animal ingredients are not used in our
products while other countries require that our mascaras
contain no parabens. One of our policies is not to test any of
our products on animals.
SHIFTING MARKET DEMANDS ADAPTABILITY
ALEJANDRO LÓPEZFounder and CEO of IM Natural
VIEW FROM THE TOP
214
Q: To what extent is the demand growing for the natural
products Agave Spa produces?
A: Everyone wants natural and organic products but the
consumer needs to be aware because nothing is completely
organic or natural. Talking about natural ingredients means
that we do not use chemicals that damage the skin or
lifestyles. Many people now want natural products that
produce tangible results, which is why we combine the
ancient with the modern. We use ancestral remedies and
the knowledge of the Mayans combined with European
technology, dermatological tests and exact combinations
to ensure it provides accurate results for the body and
skin. We want to create rituals that are suited to a person’s
lifestyle so that the effect of the treatment not only lasts for
a moment but actually changes energy points. We choose
23 points on the body that energy flows through and
these can be opened and closed. If those points hurt when
pushed, they are blocked. We unblock these energy points
and with obsidian stones we loosen the energy left in the
body and then use massage oils containing tepezcohuite, a
Native American plant, and other ancestral herbs.
Q: What factors are driving your growth?
A: When people come to Mexico, they want to try Mexican
products and this company meets that need. In March 2017
we launched an unscented line that can be mixed with
natural herbs and fruits, allowing spas to create their own
scents like alchemists. There is also a new tepezcohuite
line combined with blue agave for the face. This is what
will make it a success: everyone wants to mix and play and
create their own unique products.
Q: What are the main skin care needs you have detected
in Mexico?
A: Dryness and the resulting wrinkles are a common
concern, as are hyper pigmentation and lifting. Due
to pollution, the skin gets thinner due to pollution and
people want face-lifts to appear younger. Our after-sun
treatments are also popular because the sun can be
extremely damaging and we need to not only protect
ourselves at the beach but afterward as well.
Q: How aware is the population of the need to protect
skin against pollution?
A: People need to protect their skin against pollution,
even indoors where it can sometimes be more polluted
because people are crowded into a room or working long
hours under artificial lighting, among other factors that
produce free-radicals that damage and destroy skin. It is
necessary to use anti-oxidants to protect the skin against
this, and also wrinkles and acne.
We have discovered that the blue agave plant is full of
active ingredients that are good for the skin and hair.
It contains a powerful antioxidant, a moisturizer and
stimulates the collagen in skin. The latest research shows
that there is a fungus on blue agave leaves that has the
same properties as hyaluronic acid. It is a powerful plant.
Q: What alliances allow you to source your ingredients?
A: I work directly with agave farmers. We choose our agaves
and then create our phyto-complex and other products
from the agave leaves, plant, cooked plant, fermented plant
and other parts. This is because each part of the blue agave
has different properties for different things. We source
coconut oil from Guerrero and we have recently launched
a massage candle without paraffin. The clay bases were
created by Mexican artisans, each handmade and dried
in the sun. We work directly with Mexican farms for all
ingredients, such as those that make up our four blends of
essential oils. They contain San Juan herbs, passion-flower
and hibiscus. These ingredients are unique and require
cooperation with Mexican farmers.
We will soon launch videos on how we work with
communities that have four generations of experience in
what they do. Instead of growing our lines uncontrollably,
we prefer our products to be exclusive and luxurious.
ANCESTRAL REMEDIES, EUROPEAN TECH, MEXICAN-MADEADRIANA AZUARACEO of All4Spas and Agave Spa
VIEW FROM THE TOP
Agave Spa is a luxury Mexican cosmetics range created with
natural and traditional Mexican ingredients, the main one
being agave. All4Spas is a retailer of every piece of equipment
needed for spas
215
Q: How has Farmapiel’s expansion plan impacted its business
operations and what is the end goal?
A: Since changing stockholders around three years ago,
we have been expanding quickly and are engaging in an
aggressive growth strategy to become a big dermatology
player in Mexico. We have enjoyed triple digit annual growth
over the past year. This is a good result but it also increases
the need for cash, changes in business processes and new
people. We are now building the organization for the future.
We launched 12 products in 2016, split between the Rx
segment, dermo cosmetics and a new line of aesthetics and
we have made advances on our manufacturing plant in San
Juan del Rio, Queretaro, which we acquired from GSK two
years ago. It has been remodeled and has received approvals
from COFEPRIS. At that plant, we manufacture for local and
international companies, which is the reason we undergo
many audits. We are also working on getting FDA approval
for next year. We have been reorganizing the company and
we are close to seeing positive financial results. Measuring
market share can be complicated so we use QuintilesIMS and
ATV as yardsticks. Three years ago, we were ranked 84th for
dermatology in Mexico. We are now 15th.
Q: How will the company use the extra income generated?
A: We will be paying off our debts first, since the
management of the company and the complexity of rapid
growth can be difficult. The demand for working capital is
high with triple-digit growth, so we need to manage the
cash cycle closely. A steep sales curve is nice to see but is
costly. Products need to keep moving but distributors will
not risk buying something that will not sell.
Q: What is the company’s best-selling product?
A: We have many best-selling products such as our
prescription products for acne and whitening products for
fighting dark spots on the skin, which can be caused by sun
exposure. We also have products from Europe that treat
hair loss, such as Bioscalin, a top-selling product in Italy
and France, high-tech-enhanced shampoos and lotions and
psoriasis products. All our solar protection products are
hypoallergenic and contain no perfume or color while our
anti-aging products contain topical vitamins for the skin.
These products are used at night after washing the face and
neck and hydrate and replenish the skin with vitamins.
Q: To what extent is the Mexican population focusing on its
dermatological needs?
A: The market has grown significantly and, as the economy
grows, people take more care of themselves. For example,
more people go to gyms and because they are exercising
more, people are more aware of their image. Twenty years
ago, teenagers with acne treated it by using soap. Now,
they go to a physician and then a dermatologist, who also
looks at the accompanying parent and might point out un-
diagnosed diseases such as rosacea, dark spots or adult
acne. Innovations in dermatology mean treatments no longer
irritate so much while the combination of ingredients provides
better treatment. We have an acne product, for example, that
combines an antibiotic and a retinoid. The latter helps the
skin regenerate while the antibiotic fights the infection. The
general derma market grows on average 5-7 percent per year.
This covers OTCs, Rxs and cosmetic products.
Q: What is Farmapiel’s strategy for expansion?
A: We want to consolidate the company, export products
and establish subsidiaries outside Mexico, in the Latin
American region. Ideally, we will start with Central
America and the Caribbean, due to proximity. We will
then move to selected countries in South America. If
we have confidence in Mexico, good things can happen.
Our factory is generating employment opportunities, the
economic benefits of our production chain trickle down
and the company can grow with the right people, products
and confidence. With backup and investment from the
international private equity fund we work with, we have
managed to grow exponentially. Hopefully many other
Mexican companies will follow this rapid growth route.
SUCCESS BREEDS NEED FOR CASH, TALENT
RICARDO SPÍNOLADirector General of Farmapiel
VIEW FROM THE TOP
Farmapiel is a Mexican pharma laboratory with 24 years of
experience that is focused on dermatology. It has innovative
and quality solutions in therapeutic derma areas such as acne,
dermatitis, depigmentation and hair loss
216
Q: What are Expanscience’s main business lines in
Mexico?
A: Our Mexican business leans on two pillars. First is
the Mustela brand, which includes products for babies,
children and new and expecting mothers. The second pillar
is our osteoarthritis solutions portfolio, with medicines
and medical devices for the elderly. We put the same
effort and a similar investment into both business lines.
Q: What is the company’s R&D focus in Mexico?
A: Expanscience has three R&D goals for Mexico. First, we
want to launch our Mustela products designed for specific
skin types. It was previously believed that environment
caused skin to become dry or atopic but we recently
discovered that all babies are born with a certain skin
type. We are in the process of bringing to the market
specialized products for babies who have either dry or
normal skin types, in addition to a product for babies who
have a higher probability of developing allergies.
The second priority is to become stronger in the diaper-
cream market and to introduce Mexican parents to
this product, as many still use powder. The volume of
this market is 9 million units per year, led by Bayer’s
Bepanthen, which sells 3 million units per year. However,
the market could be even bigger as 2.3 million babies are
born annually in Mexico. Our diaper cream is designed
to prevent, calm and repair rashes and it is registered
as a medical device by COFEPRIS and recommended by
the Mexican Organization of Dermo-Pediatrics. When we
first entered Mexico in 2002, we sold around 250,000
units annually. Now we are focused on reaching 1 million
units. Our third development area is skin care for mothers.
Most pregnant women fear stretch marks, so we have
developed a daily cream and oil that guarantee the
reduction of stretch marks by 96 percent. Few women
are doing anything about their skin during pregnancy in
Mexico, so we want to create this new market.
Q: How is Expanscience’s osteoarthritis portfolio
addressing the new challenges brought about by Mexico’s
aging population?
A: We have a drug called Piascledine 300, a solution
designed to reduce pain and the progression of
osteoarthritis. It is a leading treatment in the rheumatology
pharmaceutical market and it was also developed to lower
the use of nonsteroidal anti-inflammatory drugs, which
usually have secondary effects. Our Euflexxa TA treatment
can help prevent surgery in advanced cases. It consists
of injecting hyaluronic acid into the damaged articulation
for six months. This will create a buffer solution that
replaces cartilage lost due to osteoarthritis. We expect
to become leaders with this drug – so far it became the
second best-selling product in Mexico. We are seeing
significant growth from prescription drugs, representing
35 percent of our sales. We have included a collagen
supplement called Orangel in our osteoarthritis portfolio,
a product that produces a great effect with just 40mg of
active ingredient. Although our competitors have similar
products, those need 10g or 20g to produce the same
effect. Also, we can offer capsules of this supplement
while others offer dissolvable medicine, so we expect
great success with this product.
Q: How important is the Mexican market for
Expanscience’s global business?
A: Mexico is important for Expanscience because it is
one of the company’s four strategic subsidiaries, along
with Brazil, Russia and the US. In 2016, Expanscience saw
30 percent growth in Mexico, 56 percent of which was
provided by the osteoarthritis business and 26 percent
by the Mustela line. Mexico is also the manufacturing base
for the Orangel OTC brand. The raw material comes from
the US and the product is manufactured in Mexico with
a partner company, Salutary. Euflexxa in Mexico is also a
result of a partnership with Ferring, the pharmaceutical
company in the US that holds the license for Euflexxa in
every country except Mexico, where we have exclusivity.
Expanscience is a French pharmaceutical and dermo cosmetic
laboratory focused on wellness solutions for newborns,
teenagers and the elderly. Its main lines, Mustela and
Piascledine 300, are present in almost 100 countries
R&D GOALS FOCUS ON HEALTHIER SKIN, ALLERGIESCÉDRIC ERTLÉCEO of Expanscience
VIEW FROM THE TOP
217
VIEW FROM THE TOP
Q: How important is it for Mexican companies to work
together, such as Sports World does with Grisi?
A: One of the major advantages is the direct contribution
to the national economy via the increasing quality of goods
and services that can be attained through joint efforts.
These alliances also foster competition and consumers
reap the benefits of a bigger and more balanced market.
Q: Membership also comes with access to Dentalia. What
is the strategy behind this?
A: In line with our wellness strategy, we keep adding
different services and products related to enhancing
our customers’ health and wellbeing. Dentalia offers
our customers two free-of-charge dental cleanings per
year as well as significant discounts on all their services.
Some of our additional health benefits are yearly blood
tests, nutritional and 24-hour medical phone assistance,
two ambulance services per year and special medical
insurance discounts.
Q: To what extent has Sports World incorporated activities
for children?
A: At Sports World we have an area of approximately
400m2 named FitKidz that is designed exclusively for
children. They can join more than 30 different activities
such as SafeSplash, aerial dance, indoor climbing, tae-kwon-
do and baby gym, among others. The goal is to start the
habit of exercising from a very early age and introduce
children to a wellness lifestyle.
Q: How can gyms inspire more people to be active and help
lower the chronic disease burden in Mexico?
A: Gyms are able to link sedentary people with a more active
life, not only through strength and cardio equipment but with
a robust wellness orientation that includes group classes,
meditation, yoga, Pilates, steam rooms, saunas, massage
services, nutrition experts, facilities for kids, swimming
pools and a Feel Healthy Program (for people with T2D and
hypertension), as well as many other special activities.
Q: As new gyms appear, how is Sports World prepared to
rise above the competition?
A: New gyms and studios are constantly appearing and
innovating with new forms of exercising. The competitive
advantage we have is that we can easily adapt to new
trends and offer those new activities within our facilities
at a very low or zero cost. We have a comprehensive offer
that we are constantly innovating and adapting to new
trends in the market.
Q: How many new clubs do you expect to open in 2017 and
how will you finance that expansion?
A: During 2017, we have opened four clubs and four more
are under construction with the pre-sale of memberships
ongoing, so we are in line with our expansion plans for
the year. Most of these openings have been and will be
financed with debt.
Q: Last year, Sports World mentioned wanting to expand
outside of the capital. What growth and results has it
seen from this?
A: We have 15 clubs outside of Mexico City and its
metropolitan area. We have had a very good acceptance
and positive results in the states we are present in and we
plan to expand to other states. In 2017, three of our eight
new clubs will be outside of Mexico City. In the coming
years, most clubs will be opened outside of Mexico City
but we will continue to look for opportunities in the
capital.
Q: What are your overall revenue expectations for 2017 and
are there any plans to expand internationally?
A: Our objective is to open eight clubs during 2017,
achieving 19-21 percent growth in revenues and an
EBITDA margin over revenues of more than 17 percent. In
terms of international expansion, we do not have specific
plans yet but we are open to opportunities that might
come either through organic expansion or acquisitions.
Sports World is a chain of high-end gyms in Mexico that
aims to promote a well-rounded healthy life, going beyond
providing a space to exercise with classes, nutritional advice
and other health services
ACTIVE AND EXPANDINGFABIÁN BIFARETTI
CEO of Sports World
218
Q: Sintoquim turns 40 this year. What are the company’s
most important achievements in these four decades?
A: One of the biggest achievements has been consolidation
and remaining a 100 percent Mexican company. We began
with focused distribution for food, pharmaceuticals and
cosmetics and afterward we entered manufacturing. We
produced aluminum clorohydrate for over 20 years and
during this period we started with the distribution of other
raw materials. That is our current business model. We are
venturing into nutritional supplements, particularly those
that benefit skin, hair and nails.
Q: How will you ensure your supplements stand out from
those already in the market?
A: Mexico is a virgin market for supplements and there
is a lower culture of prevention here. We believe there
is a great market niche and we are bringing specific
ingredients that will add value. One of the most important
elements of these supplements is organic and bioavailable
silicon. Part of Sintoquim’s contribution is ensuring the
product will be absorbed upon digestion. “In and out” is
a trend we have seen in other countries and that we want
to bring to Mexico: products taken orally and applied
topically that will act in synergy to achieve more visible
results in less time.
Q: In Mexico there is little culture of prevention. What is
your strategy to achieve your sales goals in supplements?
A: Data show it is more expensive to treat an illness
than to pay for prevention. It is better to convince
people who may become diabetic to change their diet
and to exercise. The government has realized this and
is promoting prevention. Mexico tends to copy more
advanced countries and what was launched around five
years ago in Japan or the US is now trending in Mexico.
There are many people that go to gyms, consumers have
begun wearing make-up from a younger age and adding
sun protection.
Q: How aware is the Mexican population that it must care
for its skin against the sun?
A: I think skincare is more a theme of vanity than health.
As a result, skincare is much more about avoiding
wrinkles, blemishes, pigmentation, cellulitis and stretch
marks because these are the issues that people worry
about. Sun care is not growing at the pace it should but
it is improving. We need to get into the habit of doing
this every day.
Q: What are the greatest challenges and opportunities
you have seen in skincare and cosmetics?
A: There are two macro trends in the cosmetics industry.
The first is multifunctionality. People prefer one product
that does many things, which is where the success
of BB creams stems from. The second main trend is
personalization. Products are increasingly specialized and
consumers want a cream adapted to their skin type. There
are now devices that measure skin type, evaluating which
type of make-up is best for that person. This technology
enables such personalization. If companies can find a
way to make these two trends complementary, they will
achieve great success.
Q: What type of technology are you implementing in
your products?
A: The cosmetics industry is one of the most dynamic because
it follows fashions and the color of the year, the ingredient of
the year, or the new claims that arise. Some concepts that
were previously unheard of are now fundamental. Consumers
are increasingly informed and aware of the ingredients in
their products and the benefits. We are bringing new
technology propositions to the Mexican market. We work
with ingredients houses that are researching today what will
be launched in five to 10 years. There are now many products
that aim to energize mitochondria in cells, or prevent the
accumulation of proteins, or promote collagen and elastin,
for example. These products promote certain functions
directly in skin cells.
VIRGIN MARKET A POTENTIALLY GREAT NICHEMIGUEL MARÍNCEO of Industrias Sintoquim
VIEW FROM THE TOP
Industrias Sintoquim is a Mexican family-owned company
focused on the commercialization of prime materials and other
specialties for the cosmetics industry. It operates in sun care,
skincare, make-up, hair and color
219
Q: Where do you source your ingredients?
A: We use ingredients from different parts of the world,
such as the US, Monaco, Germany, Brazil and Japan. We
have just signed an agreement with an Indian company
and we also work with Chinese sources. Our goal is to
have a broad portfolio to offer complete solutions to the
market so a client can buy everything they require from
us without needing to look elsewhere. Much of our added
value lies here.
Q: How have you achieved your current market presence?
What strategy will you employ to boost it?
A: We are the strongest player in hair color and make-up
color and we are also strong in skincare. Our main virtue
is that we have suppliers and commercial partners that
are classed among the top three players of their specialty.
We have a good mix between global and local companies.
We sell to L’Oréal, Avon, Unilever, Jafra, IM Natural, Grisi
and Genomma Lab, in addition to catalogue sellers such
as House of Fuller, Zermat and Arabela.
Q: What is the added value Sintoquim offers that retains
customers?
A: We have a marketing division that researches trends
from around the world. In addition, our applications
laboratory generates complete proposals or formulas for
clients to use as a base. For larger companies, we can offer
the product within the timeframe and in the quantity that
they require. We are also able to offer a safety stock to
cover any eventuality. The other two fundamental drivers
are the quality of products and price. These elements make
Sintoquim a market-leader and persuade clients to work
with us instead of the competition. Should a client wish to
develop any type of cosmetic, they can find almost every
ingredient with us, except for the very simple ones, such
as mineral oil, ethylic alcohol, etc. Clients do not have to
waste time looking for 10-15 suppliers.
Q: What strategy will you implement to continue
growing?
A: The main challenge is adapting to change. Companies
that subsist and are successful are those that identify new
niches and trends, advancing and changing faster than
others. We are in the midst of many changes: replacing
our operating system, obtaining ISO certification and
redesigning our commercial model to be more efficient
and more agile. The market is also demanding lower prices
as big companies in particular are looking to improve
cost-efficiencies. A final challenge will be to generate
alternative markets. I am confident that supplements
combined with topical products will be among the most
important market niches in coming years.
An athlete from the swimming academy SAFESPLASH
220
INSIGHT
REGULATORY CRACKDOWN CREATES HERBAL OPENINGIGNACIO LUNACEO of Biofarma
He explains that the herbal medicine industry is
experiencing a boom that would not have been
thought possible 25 years ago, when the company was
established. “It has grown significantly in monetary terms
and in numbers,” he says. This does, however, bring its
own set of problems because herbal medicine is copied
and sold on the black market as much as pharmachemical
medicine. “NOM-059 dictates that companies have to
ensure packaging does not fall into the wrong hands,”
says Luna, explaining how Biofarma helps reduce the
opportunities for counterfeit medicine by ensuring its
packaging remains safe and its products cannot be
tampered with.
In addition to adherence to strict regulatory standards,
certification from the FDA, the National Safety in Food
(NSF), strict quality control and GMPs reinforce Biofarma’s
strong position in the market. The company will continue
to release new products including a herbal remedy for
menopause, vitamin gummy bears and an anti-obesity
product. “We have noted the same opportunity in the
obesity market as the joint product market,” says Luna.
Biofarma operates four lines of business, namely OTCs,
herbal medicine, remedies and supplements. Its best-
selling product is glucosamine, which provides pain
relief for joints with osteoarthritis, where it claims over
40 percent market share. While figures for that particular
segment are hard to come by, Euromonitor estimated in
September 2016 that the herbal and traditional products
market in Mexico would be worth MX$9.5 billion (US$527
million) by 2021, not including vitamins and supplements
which it pegs at a potential MX$23.2 billion (US$1.3
billion) for the same year.
With a presence in Mexico, the US, Peru, Guatemala,
Colombia and Costa Rica, Biofarma has plans to expand
to Panama, Brazil and Chile in 2017 — large markets that
offer opportunities and consumer behavior similar to
that of Mexico. “These consumers appreciate Mexican
products and view us with respect, which is good for
us,” says Luna.
The authorities charged with regulating health matters
have launched a war on so-called “miracle” products. In
2015, COFEPRIS removed 5 million products from sale and
a further 1.4 million in 2016. This extra vigor in regulating
Mexico’s herbal medicine market has left few competitors
standing — and created an opening for companies like
Guadalajara-based Biofarma.
“In terms of herbal supplements, Mexico is much more
advanced in regulation than the US,” says Ignacio Luna,
the company’s CEO. He explains that in the US, companies
are free to manufacture their products but need to self-
regulate because a bad product will quickly be the subject
of litigation. “Mexico has done an incredible job. It has very
strong regulations,” he adds.
Due its strong regulations, COFEPRIS is recognized as a
reliable sanitary authority in many Central and South American
countries. The same agreements that enable pharmachemical
medicine to be exported to those countries also apply to
herbal products. “I believe Mexico’s regulation is increasing.
The treaties we have with different countries include herbal
medicines with GMPs and NOM-059-SSA1-2015. We receive
the same treatment as a generic or any other kind of
medication,” Luna says.
The National Association of the Nutritional Supplements
Industry (ANAISA) is working to further improve regulation
surrounding nutritional supplements. The appellative for
the products is one of the first objectives. “In Mexico our
products are known as nutritional supplements but they do
not supplement. They are more complements, as our diet is
rich in vitamins and minerals. Our products fill the gaps in our
diet,” Luna says.
NOM-059-SSA1-2015 regulates the
manufacturing and distribution of
medication
221
WHAT FACTORS IMPEDE SKIN CARE AND WHAT ARE SOME PROTECTIVE MEASURES?
ADRIANA AZUARACEO of All4Spas and Agave Spa
RICARDO SPÍNOLADirector General of Farmapiel
MIGUEL MARÍN CEO of Industrias Sintoquim
ROUNDTABLE
People need to protect their skin against pollution, even indoors, where it can
sometimes be more polluted because people are crowded into a room or work
long hours under artificial lighting. These are factors that produce free-radicals
that damage and destroy the skin. It is necessary to use anti-oxidants to protect
the skin against this, and also to protect against wrinkles and acne. We have
discovered that the blue agave plant is replete with active ingredients that are
good for the skin and hair. It contains a powerful antioxidant and a moisturizer
and stimulates the collagen in skin. The latest research shows that there is a
fungus on blue agave leaves that has the same properties as hyaluronic acid. It
is a powerful plant.
The market has grown significantly and people are taking more care of themselves
as the economy grows. Twenty years ago, teenagers with acne dealt with it by
using soap. Now, they go to a physician and then a dermatologist, who also looks
at the accompanying parent and might point out un-diagnosed diseases such as
rosacea, dark spots or adult acne. Innovations in dermatology mean treatments
no longer irritate so much while the combination of ingredients provides better
treatment. We have an acne product, for example, that combines an antibiotic
and a retinoid. The latter helps the skin regenerate while the antibiotic fights
the infection. The general derma market grows on average 5-7 percent per year.
I think skincare is more a theme of vanity than health. People want to stay
young. As a result, skincare is much more about avoiding wrinkles, blemishes,
pigmentation, cellulitis and stretch marks because these are the issues that people
worry about. Sun care is not growing at the pace it should but it is improving.
People now use sun block but they still have the idea that this should be done only
at the beach; we need to get into the habit of doing this every day. The cosmetics
industry is one of the most dynamic because it follows fashions and the color of the
year, the ingredient of the year, or the new claims that arise. Some concepts that were
previously unheard of are now fundamental. Consumers are increasingly informed and
aware of the ingredients in their products and the benefits.
Prevention is the key to good health but action usually
derives from awareness. Today, a greater percentage of
the population is cognizant of the dangers posed by
headline-grabbing conditions such as cardiovascular,
diabetes and obesity. There is much less mindfulness
regarding the impact and subsequent consequences
of environment on the skin from a daily onslaught of
pollution, sun and dirt from the outside and poor
nutritional habits from the inside. Mexico Health Review
asked relevant players in the dermatology industry about
the level of awareness of the general population of their
dermatological care needs.
223
In a growing pharma and medical market such as Mexico, efficient logistics are
vital for healthcare businesses. Companies are moving products and devices
nationally and internationally while looking for the fastest and safest way to do
it. In Mexico, the challenge of access to medicine is not only economical, it is
also geographical. Some states are difficult to access due to rough terrain, long
distances or security concerns. Many companies have also commented on the
rise of the black market in Mexico, which makes guaranteeing the authenticity
and chain of custody of a product all the more vital. The greatest challenge for
Mexican logistics and components providers is thus ensuring the supply chain in
this expansive and sometimes dangerous environment.
This chapter explores the strategies of logistics companies for dealing with and
preventing these security problems, in addition to the high-tech innovations
they have implemented in their fleets. While some are implementing
apps and designing temperature controlled trucks, others are working on
electromagnetic locks to prevent merchandise theft and putting systems in
place to chase down thieves.
LOGISTICS & SUPPLY CHAIN
10
225
CHAPTER 10: LOGISTICS & SUPPLY CHAIN
226 ANALYSIS: Rough Terrain: Navigating Mexico’s Logistics Segment
228 VIEW FROM THE TOP: Víctor Soto, Levic
229 VIEW FROM THE TOP: Rafael Figueroa, Aeroméxico Cargo
230 VIEW FROM THE TOP: José Alberto Peña, Grupo Marzam
232 INSIGHT: Daniel Pardo, Medistik
233 INSIGHT. José Aedo, SINGREM
234 VIEW FROM THE TOP: Mario García, GNK Logística
236 VIEW FROM THE TOP: José Eric Delgado, Sicamsa
237 VIEW FROM THE TOP: Ingrid Ritter, UPS
238 VIEW FROM THE TOP: Erick Jiménez, Majicarga
239 VIEW FROM THE TOP: Sergio Chabolla, ANADIM
240 VIEW FROM THE TOP: Alberto Wicker, Signufarma
241 VIEW FROM THE TOP: Alonzo Autrey, DVA Mexicana
242 VIEW FROM THE TOP: Manuel Sánchez, Diphsa
243 VIEW FROM THE TOP: Abraham Franklin, Grupo Franklin
244 VIEW FROM THE TOP: Ángel De Vecchi, VECO
245 VIEW FROM THE TOP: Edgar Arteaga, Inframedica
246 VIEW FROM THE TOP: Guillermo Martorell, Grupo RFP
247 VIEW FROM THE TOP: Antonio Pascual, ANAFARMEX
248 ROUNDTABLE: How are You Overcoming the Logistics Hurdles in Mexico?
226
Mexico can be a tough place to navigate. The country
is the 14th territorially most expansive in the world,
according to the CIA Factbook, with a mean elevation
of 1,111m above sea level. It is no surprise then that
transporting goods through rugged mountains, low
coastal plains, high plateaus and deserts is no easy feat,
especially when the goods are as sensitive to temperature
as in the healthcare industry. The distances also represent
a challenge: Mexico’s 1,943,945km2 of land extend from
the US in the north, to Guatemala and Belize in the south.
KEEP COOL
To overcome such logistical hurdles, distributors travel
by land, sea and air employing the latest technological
advances. Temperature control has become a basic-must
among Mexico’s varied climates, ranging from tropical
to desert, so companies are innovating to provide the
smallest thermal variation possible during transportation.
In addition to maintaining huge cold chain infrastructure,
creating strategic alliances is a key strategy.
"We own thousands of square meters of refrigerated
space throughout the world and we have agreements
with suppliers such as vaQtec and Envirotainer, which
enable us to maintain the cold chain throughout the entire
process. The most difficult products to transport are those
that require a controlled temperature because they are
shipped from the factory to conservation warehouses and
then to our customers or final consumers," says Rafael
Figueroa, Director General of air freight market-leader,
Aeroméxico Cargo.
HIGHWAY ROBBERY
Other challenges include navigating the security
environment, as the vast and sometimes remote expanses
traversed by fleets increase risk. There were around 1,000
assaults on cargo vehicles on highways from January to
November 2016, according to the National Public Security
System (SNSP). “[Insecurity] has impacted us significantly,
especially during times of strikes and demonstrations. During
a period of countrywide protests in January 2017 (following
a hike in gas prices), our deliveries were delayed, sometimes
up to a week, because there was no way to get through,”
says Mireya García, Director General of Distribuidora Alpilo.
ROUGH TERRAIN: NAVIGATING MEXICO’S LOGISTICS SEGMENT
To combat this, trucks are fitted with GPS,
cameras, electromagnetic locks and many
have an alarm system to quickly alert local
authorities who can then track down the
thieves. In certain cases, transports are sent
with private security at the request of the client, often
for high-value cargo.
In addition, in January 2017, the Mexican government
eliminated gas subsidies from most Mexican states,
which meant an increase in the costs of logistics
providers and provoked protests throughout the country.
However, companies are already working on strategies
to counteract this. “2017 will be a challenge from an
exchange-rate perspective,” says José Alberto Peña,
Director General of Grupo Marzam. “For us, another key
component is gasoline, which has a direct impact on
our expenses. The exchange rate will have an impact on
the industry as a whole because 90 percent of material
used to produce medicines is imported. Before, perhaps
businesses did not focus as much on driving efficiency
in all areas but it is about the details now. For example,
we have almost 500 vehicles and we have decided that
whenever we change a vehicle, it should be at least diesel.
We want to move to hybrid or electric in the future.”
HIT THE ROAD
Despite its challenges, Mexico still presents many
opportunities for logistics and companies expect growth
in the country. In June 2017, PwC forecast road freight to
grow by 3.2 percent in Mexico in 2017, rail by 4.9 percent
and air by 1.2 percent. Overall, the report states that road
remains the most used mode of transport in Mexico,
accounting for 80.8 percent of transportation.
“Five or six years ago, two-thirds of the global healthcare
market was in the US and Europe. Now, those are mature
markets and, although they are significant in size,
emerging markets are growing at faster rates. The number
one region for growth in healthcare is the Asia-Pacific
Economic Cooperation (APEC) region, mostly driven by
China and India and followed by Latin America,” says
Ingrid Ritter, Healthcare Strategist Latin America of UPS.
Factors pushing growth in the logistics area are many,
including the expansion the generics market has
seen in recent years, mostly due to the government’s
consolidated-purchasing schemes. “Information has also
pushed growth because people are increasingly aware
ANALYSIS
Mexico presents a great number of logistics challenges but just
as many opportunities. Geography, gas prices and insecurity
fall on the minus side of the ledger while increased demand
for transportation and storage are on the plus side
227
and have access to more information. People now know
that patented and generic medicines are the same. The
difference is only in the cost to patients. As Mexico is
an emerging economy, people need medicines and need
to be able to obtain it. This theme of accessibility has
boosted growth for us,” says Víctor Soto, Director General
of Levic, a Mexican logistics provider.
Additionally, NOM-059-SSA1-2015, which regulates
good practices for medicine manufacturing, came
into effect in February 2016, impacting national and
international logistics companies. “It stipulates that
to transport pharma goods within Mexico, a company
must use vehicles specifically for this purpose and
cannot transport anything but pharma goods. As we
are already dedicated to this and have a cold chain in
place, this norm has benefited us,” says Mario García,
Vice President of Operations at GNK Logística. “It is
excellent because it eliminates foreign companies from
providing transportation between states and also benefits
the security and safety of goods because they could be
contaminated by other goods and supplies in the cargo.
I am sure that within two years, labs will be working
only with logistics operators dedicated 100 percent to
pharma.”
E-COMMERCE
Pharmacies are working to improve their position in
the market, grouping together in associations such
as ANAFARMEX or Grupo RFP. They share a desire to
modernize their operations and venture into e-commerce
with logistics companies. “We are hoping for aggressive
growth, because we are still small. We need to more
than double our revenue from home deliveries in 2018,
reaching around 150 percent growth as we are starting
from a small base. We expect to see growth of around
300-400 percent in our online services,” says Guillermo
Martorell, Director General of Grupo RFP, which brings
together small and medium pharmacies. In 2016, Milenio
reported that although independent pharmacies were the
greatest in number at 22,000 across Mexico, the 7,500
branches of pharmacy chains dominate the market with
65 percent of sales.
In addition to implementing e-commerce, several logistics
companies have also highlighted the trend of increasing
demand for storage and just-in-time services from
hospitals and pharmacies. “I see this every day. Those
wanting to work in this sector understand their main
markets will be Brazil and Mexico and that they will need
to establish a presence in these high-consumption areas.
Mexico itself is a significant consumer market so there
is significant need for our customers to find the right
logistics provider,” says Ritter.
MEXICO - FREIGHT MODE BREAKDOWN 2017 (%)
air
Rail
Road
SECTORS THAT CONTRIBUTED TO MEXICO'S COMPETITIVENESS 2016-2017
SCORE OF CATEGORIES THAT CONTRIBUTED FOR MEXICO COMPETITIVENESS 2016-2017
1234567
Institutions
Infrastructure
Macroeconomicenvironment
Health and primary education
Higher education and training
Goods market efficiencyLabor market
efficiency
Innovation
Business sophistication
Technological readiness
Financial market development
Market size
—Score based on key indicators
MEXICO - FREIGHT MODE BREAKDOWN 2017 (percent)
� 80.86% Road
� 19.12% Rail
� 0.02% Air
Source: PwC
25,844places linked
118,812kmof rural (unpaved) roads
3,476bridges
178tunnels
39ferry routes
847toll stations
158,180kmof paved highways (federal, state and toll highways)
36,139kmof urban roads
1,943,945km2
Size of Mexico
228
Q: What main changes did Levic’s operations undergo
in 2016?
A: We amplified our portfolio, opened a new distribution
center in Vallejo and worked to improve our service.
We are a distributor of mostly generic medicines and
we have greatly improved our just-in-time model. The
company already has a strong portfolio in generics, herbal
medicine and wound care, so we have mostly expanded
in prescription drugs from transnational companies, which
have a slightly higher cost. Our work with transnational labs
has grown by 60 percent but in general Levic saw growth
of 14.5 percent in 2016.
Q: What have been Levic’s main drivers of growth?
A: Market factors have driven our growth, while prices and
accessibility have been fundamental over the past 10 years.
Information has also pushed growth because people are
increasingly aware and have access to more information.
People now know that patented and generic medicines are
the same. The difference is only in the cost to patients. As
Mexico is an emerging economy, people need medicines
and need to be able to obtain it. This theme of accessibility
has boosted growth for us.
Q: To what extent does Levic work with the public sector?
A: Only around 2 percent of our sales go to the government,
while the other 98 percent goes to the private sector.
Previously, a cure for a general illness cost MX$500-1,000
(US$28 -56) out of pocket to pay for a doctor and medicine.
Today, patients can receive medical care and medicine at
many pharmacies for MX$150-250 (US$8-14). Because of
this not everyone needs to use government services.
Although we have no plans to change our sales ratio,
we will need to work more in other areas, including the
government, to maintain growth rates.
Q: How is technology impacting the logistics business
and your operations?
A: We are investing in R&D to allow our customers to buy
from us online. We have a web portal that clients can log
into and browse our catalogue of products and costs,
and any order placed will arrive within seven days. We
have been working on this since the summer of 2016 and
it is continually growing. In the first month, sales were
laughable, but by March 2017 online sales represented
9 percent of our total. We are promoting this directly
through our sales force and through our logistics. We
have no fixed target for where we want to be by the end
of the year. It depends on what the market demands
because our objective is to cater to market needs.
Q: How will you achieve your 2017 goals?
A: In 2017, we will begin operations in Monterrey. We are
also working with restocking technology, that is to say
robots that stock quicker than humans and with 99.9
percent exactitude. We are only missing a pincer in our
stocking technology. Our goal is to implement this in
four of our eight centers, three in Mexico City and one
in Michoacan. Levic is working on a project in Central
America and in 2017 we will enter the Belizean market,
where we have a project with the government to send
Mexican medicines there.
Q: How do you prepare for uncertainties such as strikes
and protests?
A: Protests do not affect us much. What does impact
us greatly is the Hoy No Circula (No Drive Day). In 2016,
40 percent of our vehicles could not circulate on any
given day. With one No Drive Day per week, 20 percent
of our vehicles are idle but with the double measure,
two of every five are out of action. Distributing medicine
becomes much more difficult. There are also security
issues and areas we cannot enter because drivers are
asked to pay bribes. We do not enter areas where the
driver will be at risk, or when the risk is larger than the
reward. If we were to push this, then we would be putting
the health of the driver and the good condition of the
medicine at risk.
MARKET FACTORS DRIVING GROWTH, WEB SALES IN FOCUSVÍCTOR SOTODirector General of Levic
VIEW FROM THE TOP
Levic is a Mexican distributor based in the State of Mexico
that is specialized in the pharmaceutical sector. It began
operations in 2000 as a generics distributor and has expanded
operations throughout Mexico
229
Q: What are the greatest challenges in health for
Aeroméxico Cargo? How do you overcome them?
A: Pharma is one of the top five products we transport. Due
to quality and security concerns with land transportation
services, the industry has increased the volume of pharma
products transported by air. We have been offering
specialized services for the domestic market for the last
three years and our market penetration has grown over
100 percent each year. Today, we transport around 12,000
tons of pharma products every year, which represents 90
percent of the domestic air pharma market. Our biggest
strength is Aeroméxico’s security processes, which make
us the most secure airline to fly with. We have invested
a lot of resources over the past three years to make sure
that 100 percent of our cargo is screened and sterile,
which makes us the preferred carrier for most agencies.
Q: What health products does Aeroméxico Cargo
manage?
A: In addition to pharma, we also move biomedical
products and vaccines. We own thousands of square
meters of refrigerated space throughout the world and
we have agreements with suppliers such as vaQtec
and Envirotainer, which enable us to maintain the cold
chain throughout the entire process. The most difficult
products to transport are those that require a controlled
temperature because they are shipped from the factory
to conservation warehouses and then to our customers
or final consumers.
Q: How does working in pharma impact your business
strategy?
A: The challenge for us is to keep pace; entering the
pharmaceutical sector has been our most important
achievement so far. Four years ago, we had almost no
business in this area and now we manage a large majority
of the domestic pharma market. We have become an
airline that is flexible, that cares for its clients’ products,
employing the correct conditions and delivering the
products undamaged. Previously, we moved 20-30 tons
per month in pharma, whereas now we move over 600
tons per month.
Q: As you already manage so much domestic cargo, what
is your objective for the rest of 2017?
A: The pharmaceutical market is much bigger than what is
being moved via air freight today. We are a reliable option
and we have a commercial strategy for the pharmaceutical
market that is very aggressive. Our goal is to move more
pharma and to continue as a leader in air freight. As
an airline, we prefer to work with high-yield products.
However, Aeroméxico’s network is so large that it operates
many flights on which we can accommodate many types
of medicine and cargo; for example, if something very
urgent needs to go to Monterrey in the next two hours,
we can do it. Aeroméxico moves one of every five kilos
of the Mexican air cargo market and we want to keep
growing at the same pace.
Q: What are your plans for pharma and health in Mexico?
A: Aeroméxico Cargo has an investment plan of several
million pesos that will help further strengthen our position
in the national pharmaceutical market. In addition, with the
objective of increasing participation in the international
market, in December 2016, we formally finished remodeling
our facilities in the New Mexico City International Airport
(NACIM), an investment of several million dollars that
positions us as the company with the most modern facilities
and with the highest standards of safety and quality.
Finally, in February 2017 we launched the Health Chain
Service, which will first target the European, US and South
American markets. It will have the capacity to offer our
clients specialized active and passive solutions to achieve
a cold chain that includes freezing, refrigeration and
temperature maintenance during our cross-border flights
thanks to strategic alliances with the most recognized and
certified companies in the market such as Envirotainer,
vaQtec and Cold Chain Technologies.
PHARMA TAKES TO THE SKIES FOR DELIVERIES
RAFAEL FIGUEROADirector General of Aeroméxico Cargo
VIEW FROM THE TOP
Aeroméxico Cargo is a leading air cargo carrier and part of
the airline Grupo Aeroméxico. The company strives to meet
the needs of the supply chain, including pharma, delivering to
Mexico and the world
230
people for the position. This is setting us apart, thinking of
where we are now and where we anticipate going in the
future. We will be bringing new technology to an area of
the industry I believe has been static for decades.
Q: From where are you recruiting your talent? To what extent
do you have to go to other sectors or abroad?
A: We have not gone abroad. Our HR director comes
from outside the distribution and logistics market but
has experience in many industries. Wherever possible, we
would like to provide opportunities internally. I want to
be in a situation where all future opportunities are filled
through promotions. We are looking for the right people,
not necessarily thinking about the right person for the
position today but looking at this with a three to five-
year perspective, bringing in those that will be able to
complement our strategy going forward.
Q: To what extent do you have relationships with Mexican
universities?
A: We do not have any at this moment but that is an area we
are looking to develop. I want to bring in high-potential talent
who could be our future leaders, bring them into our growth
strategy areas to drive new models and then take them from
the conceptual phase to implementation. We have planned
for 2017 to bring in three high-potential MBA graduates who
are ready to land in a position knowing they may not be quite
ready but that we want to develop them. We are beginning
to reach out to universities so we can develop this program.
Q: What are the most important skills that you will be
looking for?
A: We will certainly be more focused on the commercial side.
We will be looking for people with learning agility, flexibility
and able to coordinate groups. I want this company to be
different to others and I see it evolving into different areas,
such as specialized segments, focusing more on customized
models. This does not mean we are walking away from what
we do today, it will be complementary. I am looking at many
sectors, such as private hospitals and insurance. At the
moment only 4 percent of Mexico’s population has private
medical insurance. This is an opportunity.
PUSHING EFFICIENCIES FOR 360° LOGISTICS JOSÉ ALBERTO PEÑADirector General of Grupo Marzam
VIEW FROM THE TOP
Q: Grupo Marzam deals with high volumes of medicines.
What management systems are in place for this?
A: That is one of our key strengths as an organization. There
is continuous opportunity to improve but we are a company
that has been in the market for 83 years so experience has
gradually made us increasingly effective and efficient. We
have 10 distribution sectors in the country, nearly 3,000
employees and 500 vehicles. That allows us to cover almost
95 percent of the country. We also have a strong focus
on technology because that is how we can drive more
efficiencies. We are a large-volume company in a low-margin
industry, so we need to be as efficient as possible.
Q: What state-of-the-art technology is implemented
throughout the company’s operations?
A: Four of our distribution centers are automated, which
drives efficiency throughout the organization. Grupo
Marzam differentiates itself from its competitors in that
all our salespeople work off apps on smartphones. All our
technology is developed internally. While pharmaceutical
companies usually have limited numbers of people in the
IT department, Grupo Marzam’s is over 100 strong. This
demonstrates how important technology is to us and that
we keep it top of mind in everything that we do. We also
have a strong focus on e-commerce. We are trying to see
how we can interact continuously with our customers
from a 360° perspective.
Q: How has Grupo Marzam’s adapted its operations to
e-commerce over the past year?
A: Our app was not fully in use 12 months ago, but today
100 percent of our sales reps use it. It is also being used
by about 500 reps in the pharmaceutical industry, who
use it to collect orders that come directly to us. We have
undergone a massive reorganization, changing 95 percent
of our executives and ensuring that we bring in the right
Grupo Marzam is a Mexican company that started its
operations 83 years ago distributing medicines to pharmacies
in Mexico City. Now it distributes healthcare products across
the country
231Q: How has the global economic environment impacted you?
How do you foresee its future impact?
A: 2017 will be a challenge from an exchange-rate perspective.
For us, another key component is gasoline, which has a
direct impact on our expenses. The exchange rate will have
an impact on the industry as a whole because 90 percent
of material used to produce medicines is imported. Before,
perhaps businesses did not focus as much on driving
efficiency in all areas but it is about the details now. For
example, we have almost 500 vehicles and we have decided
that whenever we change a vehicle, it should be diesel at the
very minimum. We want to move to hybrid or electric in the
future. We are already evaluating if this is economically viable
on a four-year horizon, which is the life a vehicle for us. This
drives us to think differently now. It is not necessarily bad but
we were not ready for a 20 percent increase in gas prices.
Q: What are you short-term plans for Mexico?
A: For us, short term means three to five years. We want
to become a holistic, logistics provider in the healthcare
segment and we will not be moving away from that.
Marzam was very much a pharmaceutical distributor
but today we are in branded, patented and generic
pharmaceuticals and we have moved into wound care,
medical devices, medical equipment and specialized
medicine. All these segments are growing.
From a customer perspective, we were focused on
pharmacies. However, our focus expands now to private
hospitals and clinics, healthcare insurance and the
government sector, which is much more holistic. Our most
important strength is the infrastructure we have. Why
not get involved with a broader range of products and
segments if we are already going past these places and our
infrastructure can cope with it? We are also open to creating
partnerships and alliances. I am a strong believer in alliances
and complementing our infrastructure and expertise.
Q: What drove the 2 percent growth Grupo Marzam
enjoyed over the past year?
A: There are many factors involved. When Marzam was
purchased 12 months ago, there were financial difficulties.
We have been ensuring that, from a business perspective,
we are driving as much efficiency and profit as possible to
ensure we are paying our customers. We have gone from
having a 65 percent fill rate 12 months ago, to a 97 percent fill
rate at the end of 2016. That was driven mainly through pure
product availability. We are probably unique in the interaction
we have with the healthcare sector in general. There is much
more confidence in what Marzam is today than there was one
year ago. A massive change in the way we operate puts us in
a much stronger position.
Q: How do you ensure that your trucks can reach their
destination through times of unrest?
A: We have implemented more technology in that area.
Our distribution network has GPS, trucks are tracked
and they have other security aspects. Our vehicles are
monitored centrally by a control center and we coordinate
them with the corresponding authorities to ensure there
is a rapid response from the police.
Q: What are the greatest challenges Grupo Marzam faces
as a distributor?
A: One of the greatest challenges we face is Mexico’s size
because it is an expansive country. We must ensure we
provide an effective, efficient and continuous service. Security
is a hot topic that requires care. We are a low-margin industry,
so all additional costs immediately impact our profitability.
We need to be prudent about how we manage additional
expenses, which, ideally, we should not have. The health
industry in Mexico is also a complex and fragmented industry
that requires different skillsets. Having had experience with
many markets around the world, I truly believe that Mexico is
one of, if not, the most complex healthcare market.
Warehouse tunnel
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INSIGHT
EVOLVING TO TAKE ON NEW SUPPLY-CHAIN CHALLENGESDANIEL PARDOCEO of Medistik
trucks to have redundancy control. Now, they use a dual
GPS system that can detect jammers and can send an
alert to the monitoring center that works with authorities
to recover stolen vehicles. Trucks have electromagnetic
closures, so they can only be opened at the delivery point.
When transporting certain products, Medistik also works
with private-security agencies that offer escort services.
Besides insecurity, another challenge the logistics sector
is trying to mitigate is the peso’s depreciation. The cost
of equipment, rent and other elements are usually in
dollars, which affects companies and customers. As
Pardo explains, Medistik is working to become more
efficient by proactively improving transportation and
warehouse management. Part of its responsibility is
ensuring companies gain control of their products
through better inventory management. Pardo highlights
that the main issue in this area is that large healthcare
institutions like hospitals do not have total product
visibility. The company looks to implement technological
tools that will provide clarity on the location and quantity
of every product, reducing inventory-related costs. “We
are adapting, anticipating and inviting our clients to join
us in this process,” says Pardo.
Ensuring full compliance with the supply chain and
product requirements is among the most difficult tasks,
specifically in Mexico, where the challenge in such an
extensive territory is being able to get everywhere. “Any
given company cannot cover the whole country. The
service we provide should help our clients deliver further
and reach the point of sale faster.”
Medistik hopes to offer the public sector some of the
solutions already in place for the private sphere, which
accounts for 100 percent of the company’s customers.
“We do keep in mind that the government is the
largest user. There are big opportunities to help it to
be more actively efficient and to drive down the cost
of healthcare,” says Pardo. He believes that Medistik’s
evolution is not limited to updating its image but in also
giving the broad vision of its service a makeover.
Logistics services can be a challenge for the Mexican
health industry’s supply chain. Companies have to maintain
safety, ensure the chain of custody and comply with their
customers’ requirements in times of high delinquency
and peso depreciation. To mitigate these challenges,
health companies like Medistik have developed strategic
solutions, latching onto new opportunities in the process,
says Daniel Pardo, the company's CEO.
The company, formerly Bomi Mexico, a business with 20
years of experience in the healthcare logistics sector in
Mexico, is looking to reinvent itself and expand in the
local market, which has limited integral logistics solutions.
It wants to triple in size in the next five years through
organic growth that includes improving its services and
offering solutions to new health segments. To further
underpin its evolution, Medistik has developed and
implemented a training and repair center to which clients
can bring their equipment and personnel, who receive full
training on how to use it.
Insecurity in the country has also created the need for
stringent security measures, especially in high-risk areas
such as Mexico City or the State of Mexico, says Pardo.
There were around 1,000 assaults on cargo vehicles on
highways from January to November 2016, according to
the National Public Security System (SNSP), although
that number might be higher because many companies
do not report the crimes, according to Mario Espinosa,
President of the Mexican Association of Vehicle Tracking
and Protection (ANERPV).
The company has taken several steps to maintain
safety and ensure the chain of custody. “We started
by establishing a security manager position. We
then enhanced our recruitment process to ensure the
trustworthiness of all our drivers,” Pardo says. A report
from FreightWatch International, a security logistics
agency, says that assailants usually operate in groups
of six to eight people in three cars and use systems that
block their target’s communications network. Pardo says
this is why Medistik changed the GPS system on all its
233
INSIGHT
counterfeit medicine, Aedo says that in the three years he has
headed SINGREM only two containers have ever been stolen.
Some states dispose of less medicine than others. Aedo says
that the longer they have been present in a state, the more
the program collects. “In the center of the country, Mexico
City, Puebla, Jalisco and Veracruz, our program works well,
but there are still many states that are lagging behind,”
Aedo says. “The North only represents 6 percent of our
collection and it is an area reasonably well covered.” He puts
this down to the fact they only entered these states a year
and a half ago and expects results to improve with time. “In
Mexico City, we collected over 12 tons in September 2016. In
the entire state of Nuevo Leon, we collected 0.2 tons,” Aedo
says. To make greater advances, more government support
is needed for companies to allocate funds to the collection
of expired medicine. “Each state supports us differently.
Hidalgo, for example, has its own collection projects and
invited us to partake. Others are practically not interested
in expired medicine. The support we receive in Guanajuato
is incredible, as is that of Mexico City,” he says.
While it is obligatory for companies to participate in the
disposal of the medicine they produce, many neglect their
responsibilities, leaving SINGREM to clean up after them.
From January to July 2016, only 57 percent of the medicine
collected by SINGREM came from affiliated companies,
while it received no contribution from the companies the
produced the other 43 percent. In addition, many generics
laboratories refuse to participate outright because of a lack
of law enforcement. This is an issue for SINGREM because
52 percent of the medicine it collects is generic. Because
these are expired meds sold two to three years previously,
Aedo expects this rate to rise in line with the proportion
of generics sold.
Despite the setbacks, SINGREM will continue its effort to
cover all 32 states as soon as possible. Once this is achieved,
it hopes to increase publicity nationwide and push people
to dispose of their medicine adequately. By implementing
6,000 containers nationwide, it hopes to collect 1,000 tons
of medicine per year.
While all households purchase medicine, few dispose of
it properly. This leads to a variety of problems including
counterfeit medicine and environmental pollution.
According to the General Law for the Prevention and
the Integral Management of Residues, “large generators,
producers, importers, exporters and distributors” of
special handling products are responsible for “formulation
and execution of management plans.” Yet, not all take
responsibility for their generated residues.
SINGREM, a civil association, was created to tackle the
problem, collecting unneeded and expired medicine from
around the country to prevent it from being tossed into
landfills. Over the past year, the association has expanded its
reach, moving into Chiapas. “We entered Chiapas through
an agreement with the state government. We delivered 40
containers, half of which were placed in government clinics
and the other half in Farmacias del Ahorro,” says José Aedo,
Director General of SINGREM.
One hurdle the association faces is the challenging security
environment in some areas of Mexico. This is the case of
Tamaulipas, in the northeast of the country, where according
to Aedo it is not present because the risks are too great.
Another example is Michoacan, a state it abandoned when
the situation became unstable, although the association
returned once it was safe to do so.
Today, SINGREM has almost extended its coverage across the
country and is now only missing from Tabasco, Baja California
Sur, Chihuahua, Sonora and Tamaulipas. It hopes to have
collected around 520 tons of medicine or 15 million units by
the end of 2016, which it estimates to represent around 15-
20 percent of medicine discarded. It has agreements with
103 laboratories to perform collections and the association
managed 4,750 containers as of September 2016. “Most of
these are in national pharmacy chains, 2,470 of them, such as
Farmacias Guadalajara, Farmacias Benavides and Farmacias
San Pablo,” Aedo says. To minimize security risks, the trucks
that collect the meds from SINGREM containers bear no logo
so as to avoid unwanted attention. While it may seem like a
container full of expired medicine is the perfect source for
AFTER MEDICINE IS THROWN AWAY
JOSÉ AEDODirector General of SINGREM
234
Q: Why should companies contract GNK Logística for their
logistics operations?
A: As a Mexican third-party logistics company (3PL),
our core business is the design, development and
implementation of integrated logistics solutions built to
suit each client’s specific requirements for warehousing,
control, distribution of goods and database management
for the health and pharma industry. We are not dedicated
to buying and selling goods, we leave that to our clients.
We are dedicated to generating valuable information, to
the traceability of goods and nationwide consolidated
transportation.
We have more than 1,000m3 of cold rooms, all of which
have temperature ranges of 2-80°C as recommended by
COFEPRIS. Our parameters are from 4-70°C, meaning that
when the temperature reaches those limits, automatically
a visual and audio alarm activates to ensure the cold chain
is not broken. We also have units with thermostats for
transporting cold products.
Q: What logistical strategies are used to service locations
that are difficult to access?
A: Before we start any operation or project, we always
perform an initial census for which we focus on distant, rural
or difficult to access communities, so we can make a note
of its address, GPS localization, type of road encountered
and all the information we need to design and establish the
best cost-benefit route. We check that the address exists
because we have encountered situations in which it does
not, or is not where thought. Once corroborated, we analyze
all the data from the census and other variables to establish
delivery frequencies. There have been times when we have
had to hire small planes or boats to get to the correct place
at the correct time because there was no road.
Q: What steps do you take to maintain security in the chain
of custody?
A: We have security protocols and procedures as
determined by our quality management system. Since
we began working with the government, the goods we
distribute are low cost or have no price value because
they are free and destined to meet the population’s
needs. We also are well known in the communities to
which we deliver. At the beginning, we did face a certain
amount of risk in some areas like Durango, where we
had to establish certain routes and schedules that were
secure. Our vehicles bear our logo, which is recognized,
and they are all tracked via GPS, have interior cabin
cameras and are constantly monitored. Our warehouse,
fleet of trucks and the goods of our clients are all insured.
We have also used and hired custodians in the past as
requested by our client protocols.
Q: What are the biggest challenges and risks a logistics
company faces?
A: The greatest risk is the loss or damage of the client’s
assets. NOM-059, ratified in August 2016, is also important
for us. It stipulates that to transport pharma goods within
Mexico, a company must use vehicles specifically for this
purpose and cannot transport anything but pharma goods.
As we are already dedicated to this and have a cold chain
in place, this norm has benefited us. Beginning a project is
often the most difficult phase because companies do not
have the full scope of the project.
Q: How does NOM–059 compare to international standards?
A: It is excellent because it eliminates foreign companies
from providing transportation between states and also
benefits the security and safety of goods because they
could be contaminated by other goods and supplies
INFORMATION IS POWERMARIO GARCÍAVice President of Operations at GNK Logística
VIEW FROM THE TOP
NOM-059 stipulates that to transport pharma goods within
Mexico, vehicles must be specifically for this purpose
235
A: We differ greatly from our competitors, mainly because
we treat our clients as business partners or allies. When
we notice they are doing something wrong, we tell
them about it. We also give them reliable, punctual and
auditable information. We are flexible in our operations
and we do not have hidden costs. Our solutions are
tailor-made and we strive to offer the best cost-benefit
solutions. Finally, our personnel is highly qualified and
field-trained to offer outstanding customer service and
a quality response.
Q: What are the main differences when working with the
public and private sectors?
A: The private sector is more demanding due to their
corporate governance and compliance structures and
procedures. The tolerable margin of error is extremely
narrow. Governments often do not have standardized
procedures or high standards when dealing with pharma
goods and their warehouses in most cases do not comply
with any NOM rules or regulations, nor do their vehicles.
We are the ones to suggest they improve to the standards
required by private industry. If companies do not have
reliable information, they do not have sales or consumption
projections. Health services were created to preserve
health, not to worry about logistics. This is the area that is
usually contracted out but there are still states and private
labs that do not contract their logistics operations.
Q: What is GNK Logística’s strategy to remain competitive
over the next five years?
A: We look to strengthen the systems we have in a
well-structured enterprise resource planning. We think
any other Mexican or foreign company with plenty of
economic resources can store and distribute pharma
goods correctly and in accordance with legislation
but we doubt they can better our learning curve and
experience of almost 11 years. We are always researching
new technology and systems that can help us be a
cutting-edge company. Generally, we would like to have
our systems working across the supply chain, from
doctors that generate the demand of goods by typing
the prescription into our system to the supply planning,
control, warehousing and distribution of those goods.
Prescriptions and requirement orders are still written
by hand, so we are looking forward to digitalizing that
information to shorten times. That will help our clients
and us to have better control and timings throughout
the supply chain.
GNK Logística is a Mexican logistics company with a division
fully dedicated to the health industry. It focuses on the design
and development of logistics systems that incorporate the
latest technological advances
in the cargo. I am sure that within two years, labs will
be working only with logistics operators dedicated 100
percent to pharma. Because we are solely dedicated to
pharma, we are not looking to expand to other sectors
or industries. We are totally convinced that we can be of
great value to our clients because of all the specialization
and investments we have made in this area.
Q: How important is tracking and how does it improve GNK
Logística’s services?
A: Whoever has information has power and tracking
has become an important tool for us and the service we
provide. As an example of how tracking benefits us, we
also offer reverse logistics to our clients, who often use
it for returns, rejections or short expiry dates of goods.
We once collected a lot that was subject to inspection by
COFEPRIS and had to trace it to its final user. It helped that
our tracking system gave us that information, otherwise we
would have been in trouble.
Q: To what extent do you have a database of consumed
goods?
A: We have developed in-house systems and also registered
them at the National Institute of Author Rights (INDAUTOR),
which can give us full traceability of each lot number and
the expiry date of every good we have distributed. We
collect inventory information at the place of delivery or
through our systems and we generate the data to know
what and when is consumed. We give this information and
other reports about inventory levels and displacement of
goods to our clients and they decide when to buy, at what
price, from whom and in what quantities. All the information
and reports needed by our clients are available 24/7 to help
them improve and speed up decision-making.
Q: How are health practitioners embracing technology
such as iPads and what are the challenges to adoption?
A: In rural communities, digital advances take longer to
permeate. For example, it takes around 40 minutes for
doctors to deal with the paperwork from a five-minute
medical consultation. Implementing a system that relies
on a certain device is not ideal because these quickly
become obsolete. We have developed our systems to be
compatible with tablets and while they can be used, it
is necessary for hospitals and rural communities to have
the right hardware and network in place, which is the
main challenge we have encountered. Another challenge
is to change the mindset of doctors from doing things
manually to electronically. Tablets are extremely useful
because they put the complete supply chain information
in one’s hand.
Q: What does GNK do differently from other pharma
logistics companies?
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VIEW FROM THE TOP
Q: How is Sicamsa dealing with the challenges of logistics
in the pharma and health industries in Mexico?
A: The main problem is the lack of logistics regulations for
the transportation of laboratory samples and other types
of materials. Shippers are often unaware of the logistical
complexities involved and delivery companies can be blamed
for any problems. We are facing these problems through
internal rules and by training our staff. The samples we
transport can be essential to a patient’s health so our mission
is to deliver it in the right way and as quickly as possible.
Q: How do you cover the whole country and reach your
clients in 24 hours with so many logistical obstacles?
A: We have contingency plans prepared for every
situation. In many cases, we incur expenses that are
not accounted for in the client’s budget and we bear
the cost ourselves. This kind of service, along with our
rapid response to unexpected issues, has generated a
significant client loyalty. We also have a hangar in Nuevo
Laredo with four jets and two pistol-engine planes, one of
which is a cargo plane, and we are introducing a seven-
ton aircraft for a new project in which we guarantee our
clients zero loss of products.
Q: How do Sicamsa’s solutions make its clients’ operations
more cost-effective?
A: Our main line of business is the transport of laboratory
samples in Mexico. We offer personalized solutions for 24-
hour delivery to IMSS and private companies and we also
transport vaccines, corneal layers and tissue for transplant.
Our main differentiators are our fast delivery times and the
level of security we can offer. Sicamsa offers transportation
of unlabeled drugs and hazardous material, which requires
special documentation. We also transport veterinary
material for small towns and municipalities.
Q: Given the range of services, to what extent do you
incorporate client requests into your offering?
A: Due to our dedication to providing 24-hour delivery
schedules, we must provide a custom-made operation for
each client. This also means that if one of our clients cancels
the order, we cannot charge the other more or decide not
to go to this location at this time, as many other logistics
companies that operate with consolidated purchases must
do. We adapt our infrastructure to client needs but we need
a commitment in return because a fleet of reserve vehicles
can become expensive.
CUSTOMIZED SOLUTIONS FOR MEXICO’S LOGISTICS CHALLENGESJOSÉ ERIC DELGADODirector General of Sicamsa
Mexico is an expansive country and distributing outside the capital city presents a unique set
of challenges. In the face of insecurity and civil demonstrations, among other disruptive factors,
companies have had to adapt strategies to keep products moving, says Mireya García, Director
General of Distribuidora Alpilo, a Monterrey-based logistics company.
“[Insecurity] has impacted us significantly, especially during times of strikes and demonstrations.
During a period of countrywide protests in January 2017 (following a hike in gas prices), our
deliveries were delayed, sometimes up to a week, because there was no way to get through,” says
García. In response, the company began forging alliances with other distributors to lend products
to each other. “We now manage a larger stock and take larger orders so that our clients are better
prepared for unforeseen circumstances,” García adds. The National Survey of Public Urban Security
(ENSU), carried out in December 2016, found that 67.8 percent of the population aged over 18
considered that living in Nuevo Leon state was unsafe, up from 62.8 in September of the same year.
Being a small company, exchange-rate fluctuations also had an impact. “The appreciation of the
dollar does impact us as our costs are sometimes in dollars and the products we distribute come
from the US. We have to continually be checking costs and margins while also paying attention to
the client because we cannot be increasing prices every three months,” García says.
THE WILD, WILD NORTH
237
Q: UPS Temperature True options enable the transport
of sensitive products. What products are you most often
asked to handle?
A: UPS Temperature True is one of our most specialized
solutions when it comes to the transportation
of temperature-sensit ive healthcare products.
Pharmaceuticals, biologics, vaccines, blood products and
medical devices are the types of products we are most
asked to ship with UPS Temperature True. UPS has control
towers that monitor all shipments, help protect against
temperature excursions and can also activate contingency
plans in the event there are unexpected shipment delays.
Q: What are the most common challenges faced when
transporting health products across borders? How do
you overcome them?
A: In Mexico, many products are transported over land
and a challenge that is not often considered is the
number of times a package can be exposed throughout
the transportation cycle. Before picking up a UPS
Temperature True shipment, UPS works with its customers
to provide a comprehensive analysis of shipping options
and procedures such as routing, type of transportation
required, who will come into contact with the shipment,
what types of carriers are acceptable for that type of
shipment and set up of contingency shipment plans.
Everything is defined beforehand, so when we do pick
up a shipment we know exactly how it is going to move,
from where to where and who needs to be notified.
Q: To what extent is the demand for storage services
increasing in Mexico?
A: As Healthcare Strategist for UPS Latin America, I
see this every day. Those wanting to work in this sector
understand their main markets will be Brazil and Mexico
and that they will need to establish a presence in these
high-consumption areas. Mexico itself is a significant
consumer market so there is significant need for our
customers to find the right logistics provider. In 2014,
we opened our newest healthcare distribution center in
Mexico City. It measures over 7,000m2, is GMP compliant
and has temperature-controlled storage capabilities.
Q: What makes Latin America attractive as a region?
A: Five or six years ago, two-thirds of the global
healthcare market was in the US and Europe. Now, those
are mature markets and, although they are significant in
size, emerging markets are growing at faster rates. The
number one region for growth in healthcare is the Asia-
Pacific Economic Cooperation (APEC) region, mostly
driven by China and India and followed by Latin America.
UPS has four strategic priority segments: healthcare,
e-commerce, emerging markets and technology. In Latin
America, we will continue to increase our footprint in
emerging markets with continued investments, especially
in the healthcare segment.
Q: What are your priorities for 2017?
A: Our latest investment in Latin America is a new
healthcare storage and distribution facility in Bogota,
Colombia. In addition, we also just added cold-chain
capabilities to our distribution centers in Mexico and Brazil.
Companies that want to conduct business in the Latin
American healthcare market need to understand the
current and upcoming changes in regulations, as well
as how channel strategies are evolving for customers. In
2017, for both Mexico and the region, we will focus on
our ongoing commitment to continue investing in the
sector. We have strong partnerships with our customers
and, more than being a logistics provider, we want to be
their strategic partner and ally that works hand-in-hand
to understand their supply chain needs and ensure the
success of their business. For example, our procurement
of Marken, a specialty courier service, is a clear example
of a new acquisition that is going to impact our ability to
service the clinical trials logistics market in Mexico and
in Latin America, allowing us to partner with companies
much earlier in the supply chain.
SPECIALIZED SERVICES FOR SPECIALIZED PRODUCTS
INGRID RITTERHealthcare Strategist Latin America of UPS
VIEW FROM THE TOP
United Parcel Service (UPS) is an American company and
one of the world’s largest distributors. Working across over
220 countries and territories, it handles 101.5 million tracking
requests per business day
238
Q: How do changes in regulations in the health industry
affect Majicarga?
A: COFEPRIS is one of the world’s strictest regulatory
agencies. Majicarga transports pharmaceutical products,
medical devices and even clinical tests but also groceries,
equipment and other products that require sophisticated
handling. COFEPRIS’ regulations, the policies of
governmental agencies like the Ministry of Health and the
ability of the health industry to respond to these changes
affect us. NOM-059 regulates good practices regarding the
manufacturing and distribution of drugs. We are in line with
this regulation, but we have been informed there will be
some updates so we are preparing for those. We are also
preparing for ISO-9001-2015 certification, which deals with
quality-management systems.
Q: What are the main challenges for Majicarga?
A: Cost-efficiency is the most pressing issue. We must
make our routes more profitable because many new, bigger
competitors are entering the business, including giant
companies like UPS, FedEx and FEMSA Logistics. These
new competitors are attracted to the segment because
distribution in the pharmaceutical sector is one of the best
remunerated. However, for a company like Majicarga it is
difficult to compete against fleets of thousands of units
and the entrance of these new competitors. The prices we
must offer are much lower than three years ago. Mexico
used to be a paradise for transportation companies, but
regulations have increased in number and strengthened
and have become more complex.
The main challenge for businesses is to find sustainable
strategies that help growing companies maintain or even
further develop so as not to be bought out or absorbed by
larger ones. Additionally, there needs to be regulation to
incentivize and boost Mexican companies.
Insecurity is another significant challenge. Although we have
a sophisticated monitoring system, the existent technology
is limited. No distributor or technology company in the
security market can fully guarantee that a unit carrying
a client’s product will not get lost or robbed. The most
stolen products are drugs like anti-flu medicine, aspirin and
cosmetics because OTCs are the easiest to sell on the black
market. To combat this, all of our employees must have a
reliable-worker accreditation. The company that provides
this service visits with our staff and performs an obligatory
socio-economic study, checks local and federal criminal
records and performs psychological tests.
Q: What are the emerging trends in storage?
A: Pharmaceutical companies are closing their storehouses
and centralizing storage and distribution within the
metropolitan area, specifically in Cuautitlan Izcalli,
Tlalnepantla and Naucalpan, in the State of Mexico. These
storehouses are both storage and distribution centers and
help reduce costs.
Q: What is your relationship with the public sector?
A: We have little direct contact with the government, but
we would like to increase our business with the public
sector because it is a good, well-remunerated market with
attractive contracts. We have focused on marketing reliable
solutions that provide security in the transportation of
medicines for the private sector.
Q: What are your priorities for the next five years?
A: The most important priority is to find new customers,
because sometimes companies become too confident with
the clients they have. We want to implement new means for
advertising through innovative channels and participation in
expos, conferences and other industry gatherings. Investing
in better security controls is preponderant: the number of
robberies increased 60 percent between 2016 and June
2017. We also need to renew our fleet. In the midterm,
e-commerce may impact us, but there are new ways of
doing business in transportation, where people upload
information about specific cargos and transportation
players choose what they want to transport.
NEW MARKET ENTRANTS COMPETE WITH GIANTSERICK JIMÉNEZDirector General of Majicarga
VIEW FROM THE TOP
Majicarga is a Mexican logistics and transportation company
based in Mexico City and specialized in delicate cargo, with
over 25 years of experience. In health, it deals with drugs,
medical devices and clinical tests
239
Q: What strategies should pharmacies put in place to
guarantee access to health?
A: There are many strategies. Farmacias del Ahorro, for
example, provides loyalty cards, giving clients discounts
or the opportunity to receive a free service. For our part,
the number of generics purchases has increased greatly
and we stock our own brands, which gives us the margin
and opportunity to keep growing. The Ministry of Health
and COFEPRIS want lower prices to help those with few
economic resources buy medicine. By stocking generics we
are responding to that need. Laboratories ask us to respect
their prescriptions and not make any changes, which we try
to do. Despite having our own brands, we also continue to
buy the same number of generics from other laboratories.
What clients want from us are good-quality products.
Q: To what extent does ANADIM enable members to
participate in consolidated purchases?
A: We do not need consolidated purchasing because our
members have enough purchasing power on their own.
Independent entities have to do this because they do
not have our levels of organization. Our members work
together to make decisions and to support each other, so
that everyone operates under the same conditions and
with the same discounts. Otherwise, we would not work
as an association.
Q: How does ANADIM function and what characteristics
does it look for in member companies?
A: When there is a governmental issue that impacts all of
us, we can help each other and this has strengthened us
over our 73 years of existence. Companies that join the
association must carry out distribution or run a strong
chain of pharmacies. Our group includes the largest
chains in Mexico, such as Grupo Benavides, Farmacias del
Ahorro, Farmacias Guadalajara, Walmart and FEMSA. We
meet every two months across the country, sometimes at
the facilities of a member company. The association just
inaugurated Analpharma’s facilities, which are incredible.
We could invite companies from across the world and
present the achievements of this 100 percent Mexican
laboratory with pride.
Q: What must be done to ensure the Mexican
pharmaceutical industry grows to its potential?
A: The innovation industry has grown greatly because
there is a lot of competition between generics,
interchangeable medicines and biosimilars. I think the
industry of innovation should be better organized and
implement prices wisely to be more competitive. This
would improve access for everyone.
Q: What added value do companies receive as members?
A: There are several benefits. Firstly, as most of our
members work in Mexico, they can use our facilities in
Mexico City to conduct meetings whenever they like and we
can help arrange any meeting with industry contacts they
would like to see. We also offer support to help solve any
regulatory issues they may face. This instills our members
with confidence, knowing there is always a team that will
support them with anything they need.
Q: What changes have you seen over your time with
ANADIM? What are your expectations for the coming
years?
A: There have been many ups and downs, moments in
which we thought the association would not survive due
to many issues, such as disloyal competition, price-fixing
and leonine conditions. However, the environment has
greatly improved in the past eight to nine years and we
have grown significantly. We are on the right path and
in five years I hope our members account for 80 percent
of total distribution. Over the next three to five years,
ANADIM will continue to play an important role in the
distribution sector as some of our members, such as
Tallis, are enjoying exceptional growth. We account for
65 percent of the distribution of medicine in the country.
A few years ago, that figure sat at 35 percent. This growth
is due to the expansion of pharmacy chains.
SUPPORT FOR PHARMACY CHAINS
SERGIO CHABOLLA Executive Director of ANADIM
VIEW FROM THE TOP
The National Association of Distributors of Medicines
(ANADIM) comprises 18 Mexican companies that are engaged
in the distribution and dispensation of pharmaceutical products
for consumption in Mexico
240
Q: What significant trends are emerging in Mexico’s
health industry and what role is technology playing?
A: There has been significant change related to patient
centricity. Organizations in this sector need to look
inward and develop a patient-oriented culture because
patients look at the pharma industry as they would the
tobacco industry: as if we were taking advantage of them.
This is due to ethical issues related to clinical trials, the
perception of abusive practices regarding medicinal costs
and a general lack of services related to the provision
of pills. However, there are opportunities beyond
merely providing medical treatment. The development
of collaborative models is a key step toward achieving
patient centricity. Such models would help companies
to improve their image and the level of health of the
population while also achieving a reduction in costs.
To improve the industry’s image, several steps must be
taken. First, we must ensure that patients know what is
being done for them. They see a pill but not the effort in
R&D and manufacturing behind it. Actively listening to
them is another key step. That is something the industry
is not used to doing, although it is aware of the necessity.
Involving the patient’s voice in the equation, going “beyond
the pill” and making a holistic effort to offer integral
solutions requires making changes within organizations. We
should train our sales forces to move beyond the “science
behind the drug” approach and educate physicians on the
relationships they need to have with patients and how to
offer more integral solutions. It is necessary to generate
real-life and real-time information through technological
platforms and to have this data corroborated by the patient.
IT enables patients to inform themselves about the
pathologies they suffer and possible therapies, empowering
them when physicians orient, monitor and help address
their problems. Creating value in this model is possible
through information technologies by, for example, using
virtual reality to teach the patient the mechanics of both
pathology and therapy.
Q: What benefits has Signufarma observed through the
use of patient-oriented IT?
A: Signufarma’s hepatitis-C platform has been a positive
achievement in terms of the information collected and
patient monitoring. This protocol creates a treatment
card that includes the complete treatment history:
when it started, whether the patient followed a therapy
beforehand and how the patient has evolved, all while
maintaining the privacy of the patient’s personal
information. The objective of these cards is to show
how many patients have become permanently free of
the hepatitis C viral load. In Mexico hepatitis C is not a
well-identified health problem, so the program enables
Signufarma and the National Institute of Medical Science
and Nutrition Salvador Zubirán to measure the number of
patients that start treatment and its success rate through
monitoring and clinical tests. We expect to help more
people by integrating more health-sector institutions into
the program.
Q: What is your strategy for sales and what results have
you seen?
A: Signufarma’s direct sales model enables us to do
several things. First, deliver medicine of a guaranteed
standard to the homes of chronic patients or to their
doctor’s office, which enables us to keep a record of
a patient’s intake. We deliver the exact prescribed
product in the correct dosage, preventing the problem
of prescription substitution. Second, monitoring the
patient has increased our sales in certain chronic-
degenerative areas between 20 and 25 percent. Patients
provide feedback about their specific needs, particularly
in oncologic and chronic-degenerative therapies. Third,
Signufarma provides patients with commercial options
such as deferred payments and discounts. We increased
our sales because we take better care of patients.
Signufarma is a Mexican company that provides compliance
programs for chronic diseases to pharmaceutical customers
through information technology and CRM programs, providing
solutions to low patient adherence
DIGITAL COMPLIANCE TO IMPROVE HEALTHALBERTO WICKERCEO of Signufarma
VIEW FROM THE TOP
241
Q: What value is DVA Mexicana bringing to the healthcare
sector?
A: EasyCoat, our own brand, includes the manufacturing
of pharmaceutical film coatings for medicines. We are
focused on understanding trends and the direction of
the market so we can build strong relationships with
our clients, offer an integral solution and launch it to
market as quickly as possible. If a client wants to launch
a medicine that has a soon-to-be expired patent, we look
at how to get supply sources that could be validated by
COFEPRIS to launch it in the shortest time possible. The
diversity of our excipients and our film coating EasyCoat
are key strengths for our pharma division. These allow
us to develop solutions in short periods of time, about a
third of the market standard.
Q: What is the profile of DVA Mexicana’s ideal client?
A: As most development does not occur in Mexico but
in the US, some ingredients cannot be changed, so the
majority of our clients are those companies that do carry
out local development, often generics companies. Some are
from the US but also from India and Israel, among others.
For these types of companies, 50 percent of their sales go
to the government through the public tenders. Generics
have much future potential in Mexico. The generics market
continues to grow expansively, at double digits.
Q: What benefits is DVA and its clients deriving from the
changes in COFEPRIS regulations?
A: COFEPRIS decided that all manufacturers must have a
GMP from an authorized source, such as the US, Brazil or
Mexico. It also mandated the separation of high-risk and
low-risk products, which means that low-risk products
require a local GMP, whereas high-risk products have to be
certified by another source. This makes the process more
agile and opens more opportunities for manufacturers.
Q: What nutritional products does DVA Mexicana offer?
A: We are focused on dairy products, bakery, meat and
beverages. We have a plant in Atitalaquia, Hidalgo, and a
laboratory where we elaborate functional solutions such
as Appenmix to optimize our clients’ product quality,
SOLUTIONS IN A THIRD OF THE STANDARD TIME
ALONZO AUTREYManaging Director of DVA Mexicana
VIEW FROM THE TOP
production cost and performance. For example, we
reformulate products to prevent syneresis, which occurs
when packaged products like beverages, ham and cheese
start losing water and consumers find water accumulated
when they open the package. We also provide the
vegetable proteins raw burgers need to stay consistent
when the consumer cooks them. For those clients that
manufacture nutritional beverages and supplements, we
create a functional mix that aims to make the product
better. With this mix, the client can obtain the right
amount of proteins, vitamins and flavor.
Q: What is your main focus: increasing the volume of
production or entering new areas?
A: We are focusing on higher added-value activities for
our customers. We do expect COFEPRIS to fully regulate
the excipient business in the same way as others, which
means having a plant with a GMP is an advantage and
provides us with opportunities to export in the near future.
Having a plant that is up to international standards is
opening the door for us. Thankfully, all the transnationals
that are in Mexico buy high-quality products from the US
and so we can compete. We must also comply with the
requirements of our foreign clients because many export
to the US and so must follow FDA regulations. Today, the
Mexican industry is facing a challenge: how to become
more efficient in logistics and productivity when buying
ingredients.
When we began to see the dollar appreciating against the
peso, the pressure on clients of pharmaceutical products
and food increased because everything is sold in pesos. The
food sector has been challenging, but we have seen many
opportunities. We have decided to invest in a functional
blends manufacturing plant to continue to expand in the
higher added-value solutions.
DVA is a pharmaceutical company focused on the elaboration
of active ingredients and pill coatings such as Easycoat,
which has been in the market for more than 10 years. It also
manufactures industrial chemicals and nutritional products
242
Q: What was behind Diphsa’s decision to offer hygiene
engineering solutions?
A: Diphsa was founded 27 years ago as a local supplier
of medical devices. Around 2000, public institutions
centralized most of their purchases and the added value
that local suppliers like Diphsa offered to the market began
to disappear. We had to identify new opportunities in the
health market and reformulate our business model.
Because we were working in infection control, we realized
that in Mexico there was a lack of solutions for hospitals.
The approach to the problem was the same as that which
many vendors use in other hospital areas: machine, sell and
service. But this was insufficient for solving the challenges
associated with infection control.
Among healthcare stakeholders there also was, and still is,
a misconception that technology can solve operational and
procedural problems. To ensure safe processes we needed
to focus on having the right human resources within the
company, as well as training and infrastructure. With this in
mind, we began to develop the concept of turnkey solutions
for the Central Sterilization Service Department (CSSD),
examining each step of the process: architectural and
operational diagnosis, workflow analysis, conceptual and
engineering re-design, construction, equipment, software,
training and process implementation. This approach has
been effective in more than 80 hospitals and we have
expanded the model to other areas of infection control,
such as hydrogen peroxide room-disinfection systems, by
developing our own brand and manufacturing in France.
Starting this year, we are implementing the model for the
generation of medical oxygen in hospitals, for which we
currently have a research and development project with
CONACYT. We are about to start exporting this approach
through two joint ventures, in China and Uruguay.
Q: What process is the company following to provide these
solutions?
A: We begin with a diagnosis in which we apply a method
we developed for hospitals. We sit down and listen to our
customers to understand their processes, their workflows
and the problems they face in daily operations. After the
diagnosis, we develop a proposal and establish a roadmap
that can take from one to five years.
Q: What added value does Diphsa offer to the health
sector’s supply chain?
A: We continuously work on state-of-the-art analyses
regarding medical technology to stay up-to-date with
the latest innovations in the health sector. We are not
manufacturers, so we have the flexibility to identify and
choose the best technology available regardless of brand.
This has been key in identifying technological trends and
innovations for all the different devices and technologies
required for a complete CSSD proposal. Our supply chain
is global, with a very strong orientation toward Europe and
Asia and we are constantly adding new products to our
portfolio. Our value is that we articulate a process rather
than a product approach.
We have partnered with and made strategic alliances with
global companies established in Mexico and specialized
in surgical instruments and operating rooms. The goal is
to provide a complete solution that guarantees patient
safety throughout the entire surgical cycle, from instrument
sterilization, to recovery after surgery.
Q: What is Diphsa’s relationship with the public sector?
A: We do not work with public institutions due to different
factors. First, standard procurement for medical devices
does not consider quality as a core value and most of the
time price is the main factor in purchases. We would like to
work with public institutions to include the best and most
cost-efficient devices in the National Formulary.
The second reason we try to avoid public tenders is bribery
and corruption. We do not believe in this practice as a
business model and believe that value must be created in
HYGIENE ENGINEERING: INTEGRATING SOLUTIONS FOR INFECTION CONTOLMANUEL SÁNCHEZDirector General of Diphsa
VIEW FROM THE TOP
Diphsa is a Mexican hygiene engineering company with 25
years in the market supplying solutions for infection prevention.
It elaborates integral solutions for sterilization, hygiene and
medical oxygen solutions for private hospitals
243
VIEW FROM THE TOP
Q: What are the challenges of biowaste disposal and how
do you overcome them?
A: Challenges in our line of business begin with regulations.
Getting the permits for the waste-collection trucks can take
seven to eight months, so if we want to serve a hospital or
to participate in a tender, we have to register trucks we
are not yet using. Also, we can only collect waste within a
catchment area and we are limited to working in the center
of the country. Opening a new plant to obtain clients further
away would require a US$20 million investment, which is
extremely risky without a signed contract in place.
Q: What process do you use to safely dispose of
biohazard waste?
A: Refrigerated trucks pick up garbage from public
and private hospitals and take it to our plant in special
containers. The waste must be refrigerated at all times
because if gas escapes from one of the bags and is from
contaminated blood, the effects could be disastrous. We
need to transport our cargo at low temperatures to avoid
evaporation and to ensure no syringes or needles break.
At the plant, workers dressed in biohazard suits put the
waste into a large container, which has an enormous tube
that rotates every hour to change the waste’s position so
that everything is burned evenly in our three chambers. The
ashes obtained from that process are filtered through a fine
fabric and taken to dumps. By the end of the process, all
we emit is water. We also burn expired pharmaceuticals for
hospitals, for which they receive a tax reduction. If they did
not burn them, someone could take them from the trash.
Our trucks also have to be zero-emission vehicles, because
this is our company’s distinguishing characteristic.
REGULATIONS HAMPERING WASTE-DISPOSAL
OPPORTUNITIESABRAHAM FRANKLIN
Director General of Grupo Franklin
terms of technology and knowledge. Most international
health companies are public or based in countries that
have very strong sanctions for corruption, so they have
strict compliance standards that would not allow them to
overestimate their sales to bribe bureaucrats, which is the
rule in most of the public tenders. International companies
that sell directly and have local offices represent a very small
number of the tender winners, which means higher prices,
less access to technology and a scattered responsibility of
technovigilance. The public institutions are not open to the
new arrangements for CSSD projects, such as public-private
partnerships with long-term contracts, while many private
hospitals have understood this can benefit the population
because of the accessibility of state-of-the-art technology
for patient care. This is the reason we have been working
mainly with them. Although there are many economic
incentives to invest our time in the public sector, it does
not match our corporate values to improve our offer and
guarantee the best for patients.
Q: What is the current situation of hospital-acquired
infections in Mexico?
A: According to the Ministry of Health, in Mexico the number
of hospital-acquired infections is only a third of those reported
by Germany or France. Considering the conditions of Mexican
hospital infrastructure, this does not make sense. There should
be a team in each hospital dedicated to epidemiological
surveillance and the continuous systematic collection, analysis
and interpretation of all the information related to health
matters. This analysis helps identify the risks and the source
of infections. In Mexico, we do not have the incentives to
gather and analyze this information because public hospitals
are very regulation-oriented and since the regulation is weak
they actually can claim that they comply with the local norms.
There is no reliable and public information that could help
patients demand higher infection-control standards. In the US
and Europe the insurance organizations took action against
this so if a patient gets infected it is the hospital’s responsibility.
Therefore, hospitals started implementing measures to ensure
proper hygiene. However, this has not happened in Mexico yet.
Training for nurses and doctors regarding infection control is
also outdated. It is quite difficult for them to acknowledge this
and to ask for internal training. We offer continuous education
and training for everyone involved with the CSSD: training in
the use of medical equipment, the best practices for washing
surgical instruments, technical support for engineering
departments, safety in the handling of sterile material and
other important topics.
244
Q: How important is the health sector to VECO’s operations?
A: Traditionally, VECO has been more focused on pharma since
we invest heavily in pollution control. Now, we are starting
to focus on hospitals, because they should invest more in
controlling the environment in both critical and noncritical
areas. We have just installed eight QUIROVECO air-filtering
units in Mexico City’s Hospital General. With this equipment,
the operating room lamp is in the center and has a High
Efficiency Particulate Air (HEPA) filter around it, ensuring the
air is sterilized above and around the operating table. When it
comes to innovation related to air purification, it is necessary
to improve the validation processes and standardized
operating procedures because air-filter technology has not
changed much in the airborne particle-efficiency filtered. The
application design, however, evolves along with our clients’
needs, which modify over time. There may be cases in which
clients require us to design an entire air-filtration system for
a special application and we validate the equipment’s quality.
Q: What steps are followed when a client requests a system?
A: It is a long process. First, the customer sets out the
required system and the air efficiency to be achieved
according to ISO standards. Then, each component of
the system is designed in accordance with the process
requested. One of the greatest issues for hospitals is
nosocomial infections because hospitals are badly designed
and the investment to correct this would be large. A
hospital should be designed so that each consulting room
has a system that brings in clean air from the corridor
and safely removes contaminated air from the consulting
room. However, to implement this change in the air system
in existing large hospitals would require demolishing the
building and starting over.
We are developing systems that mitigate this not only for
hospitals but also for home applications. One of the main
problems in Mexico, especially in cities such as Monterrey,
Toluca, Leon, Silao, Mexico City and Guadalajara, are
respiratory infections resulting from the terrible air quality.
Q: What benefits do hospitals receive from VECO systems?
A: An air-quality control system enables the reduction
of nosocomial infections caused by air contamination,
resulting in cost savings due the reduction of
hospitalization time and the use of antibiotics. Our air-
filtering technology, coupled with a highly trained staff,
can reduce or eliminate the need for antibiotics.
Q: Previously, 60 percent of your business went to the public
sector. In which areas is VECO working specifically?
A: The public sector is an important part of our business,
especially in research and energy generation. Those working
with hazardous substances understand the importance of
ensuring they do not breath the virus. The same goes for the
construction of laboratories. We also offer services to nuclear
laboratories that work in cancer treatment. We manage the
air-quality control of these centers, ensuring that radiation
does not leak. Finally, VECO works with public-sector
institutes that mix medicines.
Q: VECO sells its products worldwide. What is the added
value it offers as a Mexican company?
A: Our price/quality ratio is very good and some of our
products from 1970 are still in use today. In 2016, we
began a process to redesign our equipment to prepare
ourselves to go out and look for stronger distributors in
the US, Canada and Europe, where investments of this
type are most common.
Q: What role do you see VECO playing in health in Mexico?
What solutions can improve access to health?
A: We should get more involved in regulatory affairs, bringing
the knowledge we have acquired nationally and internationally
to generate regulations that force institutions to use adequate
air-pollution control systems. The CSG has begun certifying
hospitals and has increasingly raised standards, which has
enabled some to improve at a manageable pace. The main
objective should be standardization at a high-level.
SECURITY IS IN THE AIRÁNGEL DE VECCHIDirector General of VECO
VIEW FROM THE TOP
VECO manufactures systems and equipment for the
purification of air and gases. It provides services to industries
including electronics, energy, nuclear engineering, aerospace,
pharmaceuticals, biochemistry and oil chemistry
245
Q: What are the main solutions Inframedica offers the
healthcare sector?
A: Inframedica offers design, engineering and installation
of supply networks for oxygen and medical gas through
our wholesale and retail sales to hospitals and small
clinics. We have good relationships with many medical
groups, such as Ángeles, StarMédica, Hospital San José,
Hospital ABC and Beneficiencia Española.
Q: What strategy do you implement to ensure these clients
stay with you from the start to the end of a project?
A: Our solid infrastructure allows us to guarantee the maximum
strength, efficacy, professionalism and responsibility that
our customers deserve. With hospital projects, we have a
complete team of specialists who are ready to collaborate
on each part of the project. We collaborate with the main
health institutions and physicians in respiratory care in Mexico.
Such is the case of Seguro Popular, which uses our solutions to
provide services in respiratory care to low-income populations.
Q: How do you manage your distribution?
A: We have the largest distribution network in the country,
which guarantees the delivery of medicinal oxygen to
hospitals, clinics, homes of patients and those patients with
affiliated insurance companies or government institutions.
This network is supported by 30 production plants and 200
sales points across the country.
Q: How are you addressing sleep issues?
A: We have a high-tech sleep clinic for the diagnosis and
treatment of obstructive sleep apnea. We treat more than
1,000 patients and we have more than 80 mobile clinics
across the country offering this service.
Q: What innovation is possible in the gas distribution market?
A: The cooperation with our main partners, Air Products
and Chemicals, allows us to modernize and use vanguard
equipment for the supply of medicinal gases that contribute
to long-term competitiveness.
Q: As a market leader, what is the added value Inframedica
brings to the healthcare industry?
A: We are investing in large infrastructure to provide
services to treat diseases with high mortality in Mexico,
like Chronic Obstructive Pulmonary Disease, which in 2016
became the third cause of death in Mexico. We also develop
alliances with the main health organizations and institutions
that have allowed us to create solutions for the diagnosis,
treatment and follow-up of patients.
BETTER GAS MANAGEMENT, BETTER HEALTH SERVICES
EDGAR ARTEAGADirector of the Medical Division for Inframedica
VIEW FROM THE TOP
Inframedica is part of Mexican company Grupo Infra and has
almost 100 years of experience. It focuses on the development
of devices and infrastructural products for gas management,
health and work safety
Analyzing human gametes
246
Q: What are the greatest challenges that pharmacies are
facing in the current market?
A: We face aggressive competition from national chains that
are entering areas where regional chains had maintained
an unchallenged presence for many years. Everyone can
compete on price, but the main issue is service and a big
pharmacy can offer all the medicines listed on a prescription.
The national chains often have large inventories and if a
regional pharmacy does not, it becomes less competitive.
Medicines for chronic diseases are now in high demand
and although people are cost-conscious, they also prefer to
obtain all the items they need at one store. Service, stock,
location and price are the top four challenges.
Q: To what extent would you consider creating your own
brand?
A: More than an own-brand, we would be creating an
exclusive brand because it would be sold through our
pharmacies and would not bear the logo and branding of
each individual pharmacy. We are in the process of creating
such a brand that would be available throughout the group.
Generics are enjoying the most growth, so combining
generics with a private label should produce good results.
To date the brand is designed and developed, we are simply
awaiting regulatory approval. We hope to launch it in 4Q17.
Q: What plans do you have to put doctors in these
pharmacies?
A: We have set up 100 consultancies so far from a base of
zero and we continue to grow. Of those, 62 pharmacies
are in operation and the others are still a work in progress.
The doctors are not our employees and they have full
liberty to decide which treatment to prescribe. We use
a third party that is specialized in this area to find those
doctors. In addition to general doctors, we hope to add
specialized consultancies.
Q: To what extent will specialists in pharmacies be linked
to the specialized areas within stores?
A: They will be in two senses. First, salespeople will be
specialized in what they are selling, usually linked to the
provider, which trains those people to use the products.
Secondly, we want to add specialized doctors such as
dermatologists. We will first see how this progresses and
then bring other areas online. We are even considering
offering basic dental services. The company we are
working with to provide doctors also collaborates with
us to set up clinics in those small towns that suffer from
access issues.
Q: What growth do you expect for home deliveries and
online sales?
A: We are hoping for aggressive growth because we are
still small. We need to more than double our revenue from
home deliveries in 2018, reaching around 150 percent
growth as we are starting from a small base. We expect
to see growth of around 300-400 percent in our online
services. The platform is already running in two chains. The
back end of the platform will be the same for each chain,
although the front end will reflect the individual chain.
Q: How is the platform organized and what impact is
e-commerce having on pharmacies?
A: We sell through various channels, one of which is online,
which is an emerging and growing area. By technological
platform, we mean mostly two things. The first is information
management at the point of sale. The second enables
operations related to inventory control, to sales statistics, costs
and putting costs online to allow customers to make quick
decisions, promotions and discounts. In addition, we want to
implement specialized software for personnel management,
because there is a high level of rotation in the pharma-retail
sector and constantly training people is expensive.
Q: Will independent pharmacies have a role with the group?
A: We are working on a program to invite independent
pharmacies that we hope will be ready by the end of 2017.
We hope to close 2017 operating around 600 pharmacies,
not counting those that are independent.
SMALLER PHARMACIES FIGHTING BACK AGAINST BIG CHAINSGUILLERMO MARTORELLDirector General of Grupo RFP
VIEW FROM THE TOP
Grupo Regional de Farmacias Productivas (Grupo RFP) was
founded in 2016, uniting pharmacies such as Farmacias San
Francisco de Asís, Farmatodo, Farmacia Noscaro, Farmacias
de Dios, SFG and Súper Farmacia Gems
247
Q: What main challenges in terms of administration are
pharmacies facing right now?
A: There are 45,000 outlets, including pharmacies and
convenience stores, that sell over-the-counter drugs and
30,000 pharmacies, including chains, self-service and SMEs.
ANAFARMEX is pushing for a new model that strengthens
SME pharmacies or community pharmacies so that the
network is composed mainly of this type of business, as
it is in Europe. In Mexico, we follow the American model,
which is vertical and employs a large inventory but with little
rationality at the sales point. The pharmacy is a service that
provides drugs to the population and the European model
accomplishes this because in SME pharmacies, 80 percent
of the inventory is pharmaceutical while the remaining 20
percent is of another variety. In the American model, 30
percent of the products at supermarket pharmacies are
pharmaceutical, while the remaining 70 percent are not.
Q: What is ANAFARMEX’s main priority?
A: We want to claim the role of pharmacies in dispensation.
The WHO has proposed that all countries achieve better
product management. To that end, Mexican authorities
are working to certify pharmacy operators. We provide
performance ratings based on CONOCER’s Competency
Standard 468, which addresses the dispensation of drugs
and health-related products at pharmacies. Through an
agreement with the Ministry of Public Education and the
Ministry of Health, we provide pharmacy employees with
training from the Integral System for Training on Dispensing
(SICAD), COFEPRIS and CONOCER. In the future, we hope
that when customers enter a pharmacy of any type, they
will see a sanitary or operating license, which lets them
know there is a certified operator on site. Right now, only
30 percent of operators are certified.
Q: Medical consultations and branded generics are now
available at pharmacies. What challenges and opportunities
does this represent?
A: Fifty percent of the country’s 30,000 pharmacy outlets
now have Pharmacy Anexed Consultories (CAF), where
there are around 10 million consultations per month, more
than ISSSTE provides in the same period. However, it is
important that the doctors in these offices are trained. With
generics, pharmacies need to be clear about what is said
regarding these products. We must avoid the conflicts of
interest that arise through prescription substitution.
Q: What can be done to promote local businesses over
their larger counterparts?
A: The quality of service is fundamental. If there is no quality
service or certified staff related to those investments, the
projects will be small. A prescription must be treated as
an official document and free access to drugs must be
supported with advice from the operator. The price factor is
also affecting SME pharmacies, so the challenge is to reduce
that gap between supermarkets and chain pharmacies.
COFECE has been researching noncompetitive business
practices and hopefully in the future these will decrease.
Q: There are products that have been withdrawn from the
foreign market but are still sold in Mexico. What can be done?
A: Mexican pharmacies were not submitting pharmacovigilance
reports but after the WHO started demanding these reports,
certified pharmacy operators became obligated to do them.
We also need to reinforce the importance of the patient report.
These new responsibilities brought by the new regulations will
help authorities decide when to remove a drug.
Q: How does ANAFARMEX contribute to the eradication of
illegal products in the pharmaceutical market?
A: The WHO says that 10 percent of everything commercialized
in the market comes from illegal sources. Fortunately, in
Mexico the figure is 1.5 percent. We recommend that when
consumers purchase products, they verify that the provider
is a reliable company that has the official document of
recognition as a distributor issued by the Ministry of Public
Education (SEP). ANAFARMEX has a permanent committee
focused on the illicit market.
PHARMACIES: SAFE ACCESS TO HEALTH
ANTONIO PASCUALPresident of ANAFARMEX
VIEW FROM THE TOP
ANAFARMEX is an association that represents mainly small
and medium pharmacies but also some pharmaceutical chains,
making up a network of 30,000 sales points. The association
has been providing members with services for over 31 years
248
HOW ARE YOU OVERCOMING THE
LOGISTICS HURDLES IN MEXICO?
JOSÉ ALBERTO PEÑA Director General of Grupo Marzam
INGRID RITTER Healthcare Strategist Latin
America of UPS
MARIO GARCÍA Vice President of Operations at
GNK Logística
ROUNDTABLE
One of the greatest challenges we face is Mexico’s size, so we must ensure we provide
an effective, efficient and continuous service. Security is a hot topic that requires
care. We are a low-margin industry, so all additional costs immediately impact our
profitability. We need to be prudent about how we manage additional expenses,
which, ideally, we should not have. The health industry in Mexico is also a complex and
fragmented one that requires different skillsets. I truly believe that Mexico is one of
the most complex healthcare markets. 2017 will be a challenge from an exchange-rate
perspective. For us, another key component is gasoline, which has a direct impact
on our expenses. The exchange rate will have an impact on the industry as a whole
because 90 percent of material used to produce medicines is imported.
In Mexico, many products are transported over land but a challenge that is not
usually considered is the number of times a package can be exposed along the
transport cycle. Before picking up a UPS Temperature True shipment, UPS works
with its customers to provide a comprehensive analysis of shipping options and
procedures, such as routing, type of transportation required, who will come into
contact with the shipment, what type of carriers are acceptable for that type
of shipment and set up of contingency shipment plans. Everything is defined
beforehand, so when we do pick up a shipment, we know exactly how it is going
to move, from where to where and who needs to be notified.
The greatest risk is the loss or damage of the client’s assets. NOM-059, ratified
in August 2016, is also important for us. It stipulates that to transport pharma
goods within Mexico, a company must use vehicles specifically for this purpose
and cannot transport anything but pharma goods. As we are already dedicated
to this and have a cold chain in place, this norm has benefited us. Beginning a
project is often the most difficult phase because companies do not have the full
scope of the project. The private sector is more demanding due to their corporate
governance and compliance structures and procedures. The tolerable margin of
error is extremely narrow. Governments often do not have standardized procedures
or high standards when dealing with pharma goods and their warehouses in most
cases do not comply with any NOM rules or regulations, nor do their vehicles.
Mexico is the 14th largest country in the world, making
distribution and transportation a logistical challenge.
Added to its vastness is its reputation for insecurity, an
issue companies must overcome to successfully transport
goods. These issues not only pose logistical hurdles but
can also contribute to higher expenses. Mexico Health
Review asked relevant players from the logistics industry
how they are tackling these and other challenges while
delivering services and products in health and pharma
in Mexico.
249
JOSÉ ERIC DELGADO Director General of Sicamsa
VÍCTOR SOTO Director General of Levic
RAFAEL FIGUEROADirector General of Aeroméxico Cargo
ERICK JIMÉNEZDirector General of Majicarga
The main problem is the lack of logistics regulation for the transportation of
laboratory samples and other types of materials. Those in charge of shipments are
often unaware of the logistical intricacies involved and delivery companies can be
blamed for any problems. We are addressing this by providing more training for our
staff and we have established certain internal rules. For example, if the container
provided by our client to transport a sample is inappropriate, we would reject the
order or use one of our available containers. Even though a value cannot be placed
on samples, an inappropriate protocol can translate to a loss of millions of dollars for
clinical laboratories. The samples we transport can be essential to a patient’s health
so our mission is to deliver it in the right way and as quickly as possible.
Protests do not affect us much. What does impact us greatly is the Hoy No Circula
(No Drive Day). In 2016, 40 percent of our vehicles could not circulate on any
given day. With one No Drive Day per week, 20 percent of our vehicles are idle
but with the double measure, two of every five are out of action. Distributing
medicine becomes much more difficult. There are also security issues and areas
we cannot enter because drivers are asked to pay bribes. We do not enter areas
where the driver will be at risk, or when the risk is larger than the reward. If we
were to push this, then we would be putting the health of the driver and the good
condition of the medicine at risk. We are investing in R&D to allow our customers
to buy from us online. In the first month, sales were laughable, but by March 2017
online sales represented 9 percent of our total.
Due to quality and security concerns with land transportation services, the
industry has increased the volume of pharma products transported by air. We
have been offering specialized services for the domestic market for the last
three years and our market penetration has grown over 100 percent each year.
Today, we transport around 12,000 tons of pharma products every year, which
represents 90 percent of the domestic air pharma market. Our biggest strength
is Aeroméxico’s security processes, which make us the most secure airline to
fly with. We have invested a lot of resources over the past three years to make
sure that 100 percent of our cargo is screened and sterile, which makes us the
preferred carrier for most agencies.
Cost-efficiency is the most pressing issue. We must make our routes more profitable
because many new, bigger competitors are entering the business attracted to
the segment because distribution in the pharmaceutical sector is one of the best
remunerated. However, for a company like Majicarga it is difficult to compete against
fleets of thousands of units and the entrance of these new competitors. The prices
we must offer are much lower than three years ago. Businesses must find sustainable
strategies that help growing companies maintain or even further develop so as not to
be bought out or absorbed by larger ones. Insecurity is another significant challenge.
Although we have a sophisticated monitoring system, the existent technology is
limited. No distributor or technology company in the security market can fully
guarantee that a unit carrying a client’s product will not get lost or robbed.
251
The increase of life expectancy due to the control of infectious diseases has
given foot for new concerns such as chronic diseases, common in the elderly
population and a group of young people prone to these conditions due to
unhealthy lifestyles. Chronic diseases such as diabetes, obesity, cardiovascular
conditions, cancer and renal deficiency are a priority for citizens and healthcare
institutions. Also, issues such as teenage pregnancy, breast feeding, maternal
mortality and geriatrics are demanding more attention and more resources.
Efforts from the public healthcare system are focused on providing care
for these patients once they are diagnosed, which is sucking up most of the
shrinking public budget without producing effective results. The new action plan
is focused on prevention strategies that could help reduce the rising number of
cases, together with the creation of awareness campaigns on the main health
issues. The Mexican population lacks discipline in medical checkups, only visiting
a doctor when feeling discomfort or pain, which leads to conditions being
diagnosed in late stages when very little or nothing can be done to alleviate the
condition. This also results in higher costs for health institutions. This chapter will
cover the main health concerns in Mexico explaining what healthcare players in
the sector are doing to solve them.
HEALTH CONCERNS
11
253
CHAPTER 11: HEALTH CONCERNS
254 ANALYSIS: Serious Diagnosis for the Mexican Population
256 VIEW FROM THE TOP: Yiannis Mallis, Novo Nordisk
258 VIEW FROM THE TOP: Irma Egoavil, Ferring Pharmaceuticals
260 VIEW FROM THE TOP: Erick Alexanderson, SMC
261 VIEW FROM THE TOP: Claudio Castro, Synthon
262 ANALYSIS: The Three Types of Diabetes
263 VIEW FROM THE TOP: Carlos Oviedo, GDA
264 VIEW FROM THE TOP: Julián González, Check-Up Center
265 VIEW FROM THE TOP: Sergio Brown, Beckman Coulter and Danaher
266 INFOGRAPHIC: Obesity: A Growing Problem
267 VIEW FROM THE TOP: Carlos López, Medix
268 VIEW FROM THE TOP: Juan Carlos Borgatta, Borgatta
269 VIEW FROM THE TOP: Rogelio Villarreal, Centro de Oftalmología Monterrey
and Ojos Para México Foundation
270 ANALYSIS: Cancer a Top Killer Among Men and Women
272 EXPERT OPINION: Myriam Lingg, Swiss Tropical and Public Health Institute
and the University of Basel
274 ANALYSIS: Success Of 90-90-90 Aids Program Requires 20/20 Vision
275 INSIGHT: Juan Tamayo, COMOP
276 EXPERT OPINION: Carlos Ortiz, ABC Medical Center
Janet Pineda, ABC Medical Center
277 ANALYSIS: Maternal and Infant Health
278 VIEW FROM THE TOP: Felipe Espinosa, Laboratorios Collins
279 VIEW FROM THE TOP: Ignacio Castañón, Alcon Labs
280 ANALYSIS: Beware of Mosquitoes
254
SERIOUS DIAGNOSIS FOR THE MEXICAN POPULATION
According to the Deloitte 2017 Global Healthcare Outlook,
by 2020, 50 percent of global healthcare expenditure
(around US$4 trillion) will be spent on three causes of
death: cardiovascular diseases, cancer and respiratory
diseases. Today, Mexico’s main health concerns pivot
around endocrine disorders, cardiometabolic diseases
and CNS conditions and finding cost-effective strategies
to prevent, diagnose and treat these conditions. The main
cause of death among the Mexican population in 2015,
according to INEGI, were heart conditions, followed by
diabetes mellitus and cancer.
Mexico’s top priorities can be categorized by age group.
First, fight child obesity and teenage pregnancy to
ensure the wellbeing of future generations. According
to ENSANUT, the combined prevalence of obesity and
overweight in children between the age of 5 and 11 is
33.2 percent. Second, address the increasing prevalence
among an aging population of CNS diseases such as
Alzheimer’s, diabetes and cardiovascular diseases. Third,
educate the generation of young adults who are prone to
diseases caused by unhealthy lifestyles. “We are shifting
from infectious disease to chronic diseases,” says Oscar
Parra, Managing Director of Mexico, Central America and
Andes of Lundbeck. “Before, bacteria caused illnesses
but now diabetes, cancer, depression and
coronary diseases are more frequent. Mexico
is a young country and the main driver for
growth is its large population. Therefore, it
is important that all decision-makers in this
country realize that the young population needs to be
healthy to be productive.”
In 2016, diabetes was the second-leading cause of death in
Mexico, accounting for 14 percent of all deaths nationwide,
according to the WHO report for that year. According to
ENSANUT, the incidence of obesity among the Mexican
adult population is 71 percent although that varies across
the country depending on a number of factors, a situation
that subsequently demands different tactics, making
a concerted policy approach difficult. “There are very
clear regional differences based on the cultural traits and
customs of the population. For example, the folklore of
each state has an impact on eating habits and this can vary
widely across the country, requiring a different approach
in each location,” says Erik Alexánderson, President of the
Mexican Society of Cardiology (SMC).
The Mexican government is addressing the problem by
implementing a special tax on production and services
(IEPS) related to sugary drinks. In addition, the country is
considering the possible application of a tax on products
with a high sugar or fat content. But taxation alone will
not solve a problem that begins with the population’s lack
of knowledge about the disease and its causal factors.
ANALYSIS
Public health policies in Mexico have evolved to tackle the
challenges of a population that is living longer. The emergence
of chronic disease control as a priority is putting a strain on
public finances and highlighting the need for preventive care
PERCENTAGE OF THE POPULATION PER REGION
0
10
20
30
40
50
SouthMexico CityCenterNorth
OBESE (EQUAL OR MORE THAN 30)
OVERWEIGHT (25-29.9)
NORMAL (18.5-24.9)
UNDERWEIGHT (LESS THAN O EQUAL TO 18.5)
PERCENTAGE OF THE POPULATION PER AREA
0
10
20
30
40
50
UrbanRural
OBESE (EQUAL OR MORE THAN 30)
OVERWEIGHT (25-29.9)
NORMAL (18.5-24.9)
UNDERWEIGHT (LESS THAN O EQUAL TO 18.5)
� Obese
� Overweight
� Obese
� Overweight
� Normal
� Underweight
� Normal
� Underweight
WEIGHT IN MEXICO PER REGION (percent) WEIGHT IN MEXICO PER AREA (percent)
Source: ENSANUT 2016
255
ENSANUT’s results showed that 76.3 percent of Mexicans
do not know how many calories they should consume each
day and only 14 percent of adults comply with the WHO’s
suggestion of 150 minutes of exercise per week. Yet. the
survey also revealed that 62.3 percent of the population
considers they have healthy nutrition and 67.3 percent
consider themselves physically active.
TEEN PREGNANCY
Another major concern, both at the health and social levels,
is the high rate of adolescent pregnancies. According to
the OECD report Society Glance 2016, Mexico ranks first
among OECD countries in teenage pregnancy. Of every
1,000 babies born, 73.6 babies belong to teenage mothers
between the age of 15 and 19, while the average for all
OECD countries is 14 babies per 1,000.
In response, the government has adopted a national
strategy for prevention of teenage pregnancy: ENAPEA, a
program that was established to address this issue, targets
zero pregnancies for ages 10 to 14 and a reduction by half
for ages 15 to 19 by 2030.
FIGHTING CNS CONDITIONS
Regarding CNS conditions, the most recent National Survey
of Psychiatric Epidemiology shows that 23 percent of the
population suffers from a mental condition. According
to the Mexican Health and Aging Study (ENASEM),
which appeared in the World Alzheimer Report 2016, the
prevalence of dementia was 6.1 percent in the population
aged 60 and above. The study also found that diabetes and
depression were a risk factor for this condition.
To face these health issues, the public healthcare systems
are investing in prevention and early diagnoses to lower
the costs of treatment, especially amid a rise in life
expectancy. According to INEGI, life expectancy for
Mexican men increased from 71 years in 2010 to 73 in 2016
and for Mexican women from 77 in 2010 to almost 78 in
2016. According to Deloitte’s Global Health Care Outlook
2017, life expectancy in Mexico is projected to increase
by one year by 2020. The report estimates that by 2020,
global health expenditure will climb to US$8.7 trillion, from
US$7 trillion in 2015. Prevention and early diagnosis could
help reduce this burden. “Mexico has done a great job in
generating consciousness, due in part to the government’s
sponsorship of a large number of campaigns, although
there is still a great deal of work to do. Habits need to
change, which is difficult,” says Carlos López, Director
General of Mexican company Productos Medix, which is
dedicated to fighting overweight and obesity.
The private sector also has a significant role to play in
the landscape of prevention and care and partnerships
between private and public companies have become
strategic. “We are focusing more on improving our
patients’ outcomes by helping institutions measure results
and apply effective solutions, which gives us a competitive
advantage. AMIIF and IMSS are also launching a project
to prioritize a group of critical diseases in which they
create rules so that the different companies offer shared-
risk models that can provide access to innovations,” says
Alexis Serlin, Director General of global pharmaceutical
and biotechnological company Novartis.
These initiatives and joint efforts between the private
and public sector will be key to addressing Mexico’s main
health concerns. “Private companies are changing from
being providers to becoming partners,” says Fernando
Oliveros, Vice President of Medtronic.
Source: World Alzheimer's Report 2015
ESTIMATED NUMBERS OF PEOPLE WITH DEMEN-TIA, MEXICO
0
2
4
6
8
10
12
14
16
18
2030202520202015
ESTIMATED NUMBER OF PEOPLE WITH DEMENTIA IN MEXICO (millions)
� Men � Women
Source: OECD data
OECD COUNTRIES WITH HIGHEST TEENAGE FERTILITY
0
10
20
30
40
50
60
70
80
Hun
gar
y
Slo
vaki
a
US
Turk
ey
Chi
le
Mex
ico
BABIES BRON FROM TEENAGE MOTHERS FOR EVERY 1000 BIRTHS
BABIES BORN FROM TEENAGE MOTHERS IN OECD COUNTRIES (per 1,000 births)
256
Q: Novo Nordisk is working on oral insulin. What would
the impact be in Mexico, where diabetes rates are so high?
A: Oral insulin has been the Holy Grail of diabetes for
many years, other than finding an outright cure. It would
be significant in a market like Mexico, but it is not a silver
bullet. In the midterm, it is more likely that oral glucagon-like
peptide 1s (GLP1s) reach the market, which could offer an
excellent level of glycemic control for patients, with minimal
risk of lowering glucose below optimal or safe levels. The
arrival of oral GLP1s will transform treatment across the
globe. As a company, we are investing in both technologies,
but we see oral GLP1s as a faster and better route into the
oral market, which should occur in the next five to 10 years.
Q: What advantages does Novo Nordisk’s new drug
semaglutide for obesity offer and why move into this
segment?
A: We have been working in diabetes for more than 90
years. For us, obesity is an adjunct area that has always been
very exciting, but has never been considered a disease by
the community of physicians. We have developed two GLP1
molecules that work on both diabetes and obesity. One is
commercially available in Mexico, called liraglutide, which is
available in two formats: one to treat diabetes and a second for
treating obesity. The other is semaglutide, the next generation
of GLP1, which will also hopefully be used for diabetes and
obesity. The current GLP1 has excellent data in terms of
efficacy, safety and weight lowering effect and clinical trials
with semaglutide have shown even greater promise. The good
news for us is that we have made an entry into this market and
we have other products in the pipeline for the next five to 10
years. We carry out many clinical trials in Mexico and the sites
here are among the most efficient in the world.
Q: Just over 6,000 people suffer coagulation issues in
Mexico. What is the advantage for Novo Nordisk to cater
to such a small number of patients?
A: There is an unmet medical need for patients, so our
products make a very real and significant difference. As
a company, we only enter a therapeutic area if we can
make a difference. With our strong history in molecular
engineering, hemophilia is an attractive space in which
Q: COFEPRIS is known for its strict regulatory approach.
How did this impact Novo Nordisk’s operations?
A: Mexico has implemented strict regulations that have
impacted the entire value chain. These restrictions are
well-founded and are a natural evolution of the Mexican
industry. This is a positive tendency. There are some
restrictions placed on operations, but overall the standard
of production in the country is positive.
Q: With the increasing number of generics companies
entering Mexico, what strategy are you employing to
ensure Novo Nordisk products retain market share?
A: Mexico is a market in which generics are now dominant,
mostly in oral treatments, but less so for insulin and
injectables. Protein products cannot be copied exactly
due to the many intricacies and stages of the production
process and their impact on the resulting molecule. Novo
Nordisk has a broad range of innovative insulin products
and injectables, so the biosimilar/generics trend has not
had a dramatic effect on our business.
In addition to the top products, we offer high quality
previous generation products at even more affordable
prices. We compete directly with biosimilars in the high
volume/very low price segment, while our previous-
generation products compete in the medium price-range
and our latest and most innovative products compete in
the best-in-class tier.
Q: Last year, Novo Nordisk was the government’s top
provider of human insulin and had the third-largest share
of the overall diabetes segment. Can the company keep
pace going forward?
A: Novo Nordisk is the largest insulin provider in the world,
with over 50 percent of the global insulin market and
25-30 percent of the overall diabetes market. In Mexico,
we are not the market leader yet and last year we had
8-10 percent of the market, depending on the segment,
which is three times less than our global average. As the
demand for better diabetes care and products in Mexico
is growing, we are sure we will continue to grow strongly
in coming years.
TREAT NOW TO AVOID COMPLICATIONS LATERYIANNIS MALLISVice President and General Manager of Novo Nordisk Mexico
VIEW FROM THE TOP
257
the industry and patients must all contribute in tandem. We
will continue to offer attractive price points for our products
to make sure that an increasing number of patients can
receive better treatment. If they are using human insulin
now, perhaps they could move onto modern insulin and
then potentially to our best-in-class and most innovative
insulin: insulin degludec.
We need to help and empower people with diabetes to
take ownership of their disease, follow the regimen, do not
cut corners and become really interested in achieving the
best outcome, to see real progress in bending the diabetes
complications curve. If patients follow this path, they may
be able to avoid retinopathy, blindness or kidney disease
and live a healthy life.
In most countries, pharmaceuticals represent only 10
percent of the total cost of diabetes. If people can invest
that first 10 percent or even a little more to get access
to better products, a big part of the other 90 percent of
costs can hopefully be avoided. In Mexico, this is critical,
because the system is now treating the complications of
people that began suffering from diabetes 15 years ago.
Since then, the diabetic population has more than doubled.
we can apply this principle of synthesizing, developing,
creating and producing proteins. Apart from the
gratification of improving the everyday lives of people with
hemophilia, it is also an attractive commercial opportunity.
Q: What is the company’s market position in the
hemophilia segment?
A: For patients with hemophilia who have developed
inhibitors, we are leaders with recombinant factor VIIa
(rFVIIa) in Mexico, offering treatment to almost three-
quarters of them. From the smaller inhibitors segment,
we are now entering the broader hemophilia population.
Turoctocog, our new recombinant factor VIII product,
entered the market in 2017 and it has been successful so far.
Q: What is the added-value Novo Nordisk provides in the
growth hormone segment over its competitors?
A: We offer a constant presence and dedication to the
patient. When we enter a segment or a medical need, we
are there to stay. People know they can depend on us, that
we will continue focusing on that area and supporting the
patients for as long as there is demand for our products. We
have attractive devices for patients, such as a pen instead
of a needle and syringe. In addition, we support patients
and doctors with education and other services.
Q: As head of Novo Nordisk Mexico, how will you
contribute to Mexican healthcare over the next two years?
A: Diabetes is a problem that is too big for one company or
party to solve. The public sector, the medical community,
Novo Nordisk is a Danish pharmaceutical company that is a
world-leader in diabetes, growth hormones, and hemophilia.
With a global presence in over 180 countries, it has been
operating in Mexico since 2004
Technological innovation at Médica Sur
258
casa (Baby at home) that helps patients with a fertility
need who do not have the purchasing power to access
treatment. The major problem in reproductive health is
that all costs are paid for fully out-of-pocket, so not all
patients are able to undergo treatment. As world leaders in
reproductive care, through our Proteger (Protect) program
we work with INCan and other associations to identify
and support female patients who have cancer and could
potentially have a future reproductive need. Our program
enables them to protect their ovules and thus ensure
future possibilities of getting pregnant. We work mostly
with breast cancer patients because it is a disease that
can be cured if detected early enough.
Q: What internal and external factors have contributed to
the company’s growth?
A: Ferring has enjoyed success in the private and the public
sectors due to our portfolio and because we are committed
to helping people become parents and to keeping mothers
and babies healthy, from conception to birth. Over one-third
of our investment in R&D targets innovative treatments in
reproductive and maternal health but we are also passionate
about making a difference to people’s health and quality
of life through our work. Something we are working on
is diversification. We supply to 18 countries in the region,
which has also helped us to grow and we have striven to
differentiate ourselves and bring products here that could
have an impact on the population.
Q: Which products will you bring to Mexico?
A: We will be launching three new products in the short
to medium term. The first is the treatment for erectile
dysfunction. The others are focused on fertility. One is a
biotech product that is a recombinant treatment, different
from what is on the market because it enables doctors to
tailor doses to a patient’s specific needs. The other is a
treatment that makes it easier for a fertilized egg to attach
to the uterus at the beginning of pregnancy. This treatment
has an innovative application and dissolution method
that supports the proper absorption of the drug, which
differentiates it from other intravaginal alternatives. This
will be on the market in September 2017.
Q: Ferring operates in many areas, some quite specialized.
Which are the most relevant for the Mexican market?
A: Our urology portfolio contains a product aimed at
hormonal dependent prostatic cancer, an antagonist that
enables fast and safe disease control without increasing
cardiovascular risk, a relevant factor for the Mexican
population. In addition, in August 2017 we will be launching
a product for the treatment of patients with erectile
dysfunction. Although it would be a first-line treatment,
it will be particularly useful for patients with metabolic
syndrome, obesity or cardiovascular disease because this
segment is at risk if systemic treatment options are used.
Q: What is Ferring’s most interesting project at this time?
A: Ferring is not a Big Pharma nor an orphan drugs
manufacturer but a specialized company attending niche
pathologies. We are becoming a more technology-oriented
company, which is due to the areas in which we work. For
example, we manage a portfolio for patients with chronic
intestinal disease, which is not so frequent, is difficult to
diagnose and patients need a lot of follow-up during the
treatment. We have been providing digital tools to provide
such follow-ups for the past three years.
Q: How can technological innovations help patients?
A: The way they work varies according to therapeutic
areas. For example, we have an app for patients with
inflammatory bowel disease that provides information on
the different stages of the disease and the reasons behind
its progression. The main issue for these patients is that
even though the disease may be controlled, there could be
a specific event that pushes it to another stage. We provide
support and teach them to identify symptoms. Another
program helps patients with prostatic cancer track the
disease properly, providing them with access to prostatic
antigen testing. Ferring also runs a program called BB en
DIVERSE NICHES PROVIDING GROWTHIRMA EGOAVILDirector General of Ferring Pharmaceuticals Mexico
VIEW FROM THE TOP
Ferring Pharmaceuticals is a Swiss company that has a wide
portfolio of products spanning prostate cancer, birth, intestinal
inflammation, assisted reproduction, bed wetting, cirrhosis
bleeding and coagulation issues
Q: What challenges do you face when bringing innovation
to Mexico and how do you overcome those?
A: Sometimes, access to innovation in Mexico is not easy
and can take a long time. Even if innovation can deliver
added-value, it must be proven. Adoption of innovation
can also be challenging as it sometimes means that the
therapeutic conduct has to be changed. For example, our
new erectile dysfunction product will meet an unmet need
and for it to be effective we have to work with physicians
and medical associations to ensure it is used in the right
way and prescribed for the right patients. The testing
and dosage adjustment for the recombinant personalized
fertility treatment that we will be launching will be different
from current alternatives in the market and will require us
to support physicians as they adopt the product.
Q: Ferring entered a partnership with Metabogen to
produce probiotics for pregnant women. What role do
alliances play for the company?
A: Alliances are important. However, Ferring is a private
company focused on innovation and clinical research and
just like all companies we need to be selective in this area,
allying with those that could help maximize our business.
The investment required to put a product on the market
is huge, sometimes over US$1 billion, and the likelihood of
success is limited. Companies that are good at R&D in a
specific area can benefit from these alliances.
Q: There is a lack of reliable, updated information on health
in Mexico. Is there an opportunity to use your apps to
provide a database?
A: That is not so easy. We can extract some epidemiological
data but the aim of our digital tools is to support doctors with
patient management and to understand diseases. Institutions
are becoming more open to collaboration so perhaps there
may be an opportunity to explore an alternative like this
in the future. If we want to be successful as a country and
society in changing Mexico’s healthcare indicators we have to
find ways to make alliances with public and private players.
Q: What will your priorities be for 2017 other than launching
those three new products?
A: We will have to maintain our leadership in the area
of fertility. We closed 2016 with over 60 percent market
share in Mexico’s fertility segment. We have to keep doing
what has worked and also find new ways to support our
business over the long term. There is an opportunity with
our product for prostatic cancer to help more patients
at an institutional level, so we need to work with public
institutions to show the benefits this hormonal treatment
could provide without increasing cardiovascular risk and to
ensure it is fully reimbursed. We will also work to maximize
our digital platforms to ensure that everyone who can
benefit from them has access.
260
The Mexican Society of Cardiology (SMC) focuses on the
study, research and execution of new knowledge in the field of
cardiology for scientific and academic applications in Mexico.
Based in Mexico City, it has branches throughout the country
an absolute truth 20 years ago is no longer useful. In half a
century, cardiology has changed immensely and I cannot
imagine what it will be like in 50 years.
Q: What cardiac problems most plague Mexicans?
A: Cardiac diseases are the main cause of death in the
Mexican population, accounting for about 127,000 deaths
every year. This mortality rate is higher than that of cancer,
pulmonary diseases and even diabetes. In fact, most diabetic
patients die due to heart failure. Ischemic heart disease and
heart attack are the main cardiac problems causing these
deaths. There are many risk factors for these conditions
and our population has most of them. The major ones are
tobacco use, hypertension, atherosclerosis, dyslipidemia
and diabetes mellitus. Then there are secondary factors like
overweight, obesity, sedentarism, stress and tension. What
triggers the burden of cardiovascular problems is that 20
million Mexicans are hypertensive, only a third of them
know it and just a portion of those are well-treated. Plus,
about 60 to 70 percent of our population has altered lipids.
But since these are problems that do not generate major
discomfort for a long time, people only seek care when they
are experiencing grave symptoms.
Q: What are the main challenges in addressing these issues?
A: The number of patients with cardiovascular disease is
rising every day. We see young people dying of a sudden
heart attack. There are patients 30 or 40 years of age with
heart problems due to diabetes, hypertension or obesity at
a young age, and many of them never did anything about
it. This is due to the Latin culture of not going to the doctor
until presenting pain. In Mexico, there is no preventive culture
like in Europe, the US or Canada. Besides these young people
dying of heart disease, we have a population niche that did
not exist before: the elderly. With the control of infectious
diseases, we have increased life expectancy and people now
live to 76 on average, much more than 20 years ago. Today,
we have many 80-year-old patients and their probability of
suffering from cardiac disease is high as these are chronic
diseases caused by age. Our challenge is to take care of
these two population groups and achieve the WHO objective
of reducing cardiac death by 25 percent by 2025.
Q: What are the main problems the society faces in the
different regions of the country?
A: There are very clear regional differences based on the
cultural traits and customs of the population. For example,
the folklore of each state has an impact on eating habits
and this can vary widely across the country, requiring a
different approach in each location. Some eating habits make
people more prone to atherosclerosis, the accumulation of
cholesterol in the arteries, because they eat too much fat
and red meat. Also, working habits and stress levels to which
each population is exposed have an impact. The northern
states have a strong custom of achieving targets rapidly, so
they work under a lot of stress. In higher income locations,
work hours are longer, so people usually eat out and lack
time to exercise, which puts people under more stress. With a
lower income demographic, people have more time to move
and walk. The weather and pollution also play an important
role. Considering these factors, we cannot pretend that what
we do in one place is applicable to others. We cannot look
at Mexico as a unique concept because it is the result of
a group of situations and environments. We cannot make
public health solutions based on a standard citizen because
there is no standard citizen.
Q: What is the association’s relationship with regional
cardiology societies?
A: For the Mexican Society of Cardiology it is important to
approach the organization’s regional branches. We believe
there should be more cooperation between associations,
so their projects can have a national health and educational
impact and have access to the improvements developed in
our central offices. That also creates a stronger sense of
belonging. We have signed agreements with seven regional
societies and we are working on more. These agreements will
give them access to our expertise, databases and academic
sessions. Cardiology is evolving at a high speed; what was
NATIONAL-LOCAL EFFORT NEEDED TO COMBAT HEART DISEASEERICK ALEXANDERSONPresident of the SMC
VIEW FROM THE TOP
261
and in certain circumstances almost 50 percent. Our
company is always betting on the future.
Q: What are your plans for the plant in Jalisco, soon to
open and how will it impact your position here?
A: The plant required an investment of around US$20
million and will measure 8,000m2 with a capacity of 200
million tablets, 200 million capsules, 15 million blister
packs and 1 million bottles. The plant is mainly focused on
high-containment products such as oncological products,
for which volumes are small. It will be certified by the
EMA, as are all our sites, because we have plans to export
in the future.
The main focus right now is to produce for
Mexico but since COFEPRIS is recognized
in certain Central American countries, some
products manufactured in this plant will be
sent to Central America. Given Mexico’s
proximity to the US, in the future it could be
an option to gain FDA approval to send our
products north as well. There is no doubt
the plant will make our company stronger.
We did not build it to increase our production capacity
because we have enough capacity globally to supply
Mexico without a problem.
Q: What are Synthon’s plans and expectations in the
coming years?
We want to become a quality reference in oncology and to
be ranked within the top 15 laboratories worldwide treating
CNS and MS. We have two chemotherapy products in the
market and are launching products for multiple myeloma
and lung cancer, and we are working on Imatinib, our first
product for leukemia. We are the only lab in Mexico that
has three aromatase inhibitors for breast cancer.
Q: What is the strategy behind Synthon’s shift from
generics to CNS, oncology and MS?
A: We still produce generics in these therapeutic areas
but the dream of Synthon’s founder was to develop
high-quality molecules at affordable prices to reach
unattended populations.
During its early stages, the company developed molecules
for large consumer volumes. International market trends
eroded the price of these molecules and in 2007 the
company reconsidered its mission. Generics were growing
because countries were seeking quality drugs at good
prices and biotechnology provided the biological medicines
to replace small molecule medicines. We
wanted to reach patients in both areas
so we created a division called Synthon
Generics and another called Synthon
Biopharmaceuticals. The latter develops
new molecules such as antibody drug
conjugates to fight cancer, especially breast
and prostate cancer.
Synthon focuses on CNS because the
population is aging. If we had evaluated the market 50 years
ago, we would have chosen to tackle tuberculosis or typhus
because people died of these illnesses at a young age. A
change in hygiene habits controlled those diseases but new
ones developed as people grew old, such as Alzheimer’s,
Parkinson’s and cancer. Now CNS is a big market because
there is a large population that needs care.
Q: What areas of research do you manage in Mexico?
A: In Mexico we carry out the clinical studies that the
authorities require of us and participate in the company’s
global research projects. We are planning to start phase
three of our SYD 985 project involving breast cancer
monoclonal antibodies and Mexico is one of the study’s
sites. We will look for patients needing treatment and
register the protocol with CROs. We need patients with
terminal breast cancer that bear specific technical traits,
such as HER 2 positive tumors. Globally we invest around
35 percent of our total sales in research in a regular year
RECONSIDERED MISSION BROADENS FOCUS FROM
GENERICSCLAUDIO CASTRO
General Manager of Synthon
VIEW FROM THE TOP
Synthon, founded in 1991, looks to become a recognized
leader in specialty pharmaceuticals, focusing on autoimmune/
neurodegenerative diseases, particularly multiple sclerosis
(MS) and oncology
35%of total sales
revenue is invested in
R&D globally
262
THE THREE TYPES OF DIABETES
It is no secret that diabetes is rampant in Mexico, linked
to the poor lifestyle choices of its citizens and increase
rates of obesity. Despite the efforts of health organizations
and private companies around the country to prevent
development and promote early diagnosis of the condition,
prevalence rates are still high. By 2014, around 422 million
people worldwide suffered from diabetes, which is one in
every 11 people, a figure that has quadrupled since 1980. The
latest WHO figures attribute 1.5 million deaths per year to
diabetes, most of which occur in low and middle-income
countries as the population lacks access to the medicine
and technology needed.
“The number of deaths due to diabetes multiplied by
about seven times between 1980 and 2015, from around
14,600 in 1980 to 98,500 in 2015. In the 21st century so
far, there have been 1.1 million Mexican deaths directly due
to diabetes. This is a grave problem,” says José Narro,
Minister of Health of Mexico. According to a WHO report,
in 2016 diabetes was responsible for 14 percent of deaths
in Mexico, more than all cancers, which killed 12 percent
of the population. In 1980, diabetes was responsible
for only around 7 percent of deaths in Mexico and has
consistently risen year on year. Being overweight, obese
or physically inactive increases the risk of contracting
diabetes. Mexico has an operational strategy for fighting
diabetes, overweight and obesity and physical inactivity.
It has implemented evidence-based national diabetes
guidelines and standardized criteria for referral of patients
from primary care to higher levels of care. It also maintains
a diabetes registry. Furthermore, primary care facilities
generally carry insulin, metformin, sulphonyl urea, blood
glucose measurements, HbA1c tests and urine strips for
glucose and ketone measurement.
Private companies are also capitalizing on this opportunity
to provide services for the millions of Mexicans that suffer
from the condition and need follow-up services. Some such
as Uhma Salud, are providing diagnostics and online portals
to change habits and prevent the conditions from developing
in the first place. Others such as Salud Cercana are providing
follow-up services for those already diagnosed with chronic
conditions. However, despite the opportunities, investment
fund Dalus Capital remarks that many young companies lack
the knowledge, network and understanding of the ecosystem
to create impactful companies.
TYPE 1 DIABETES (T1D)
T1D, previously known as insulin-dependent,
juvenile or childhood-onset diabetes, is usually
present from birth, childhood or adolescence
and is characterized by a lack of insulin.
Causes and risk factors remain unknown and prevention
techniques are yet to be discovered, though it is thought
to be the result of genes and environmental factors yet to
be determined. A daily dose of insulin, the hormone that
controls blood sugar levels, is needed to prevent death.
Symptoms of T1D include frequent urination, thirst, constant
hunger, weight loss, vision changes and fatigue.
TYPE 2 DIABETES (T2D)
T2D is known as acquired diabetes, as it is usually caused by
risk factors such as obesity and by the body’s ineffective use
of insulin. It is much more common than T1D and accounts
for most diabetes-related deaths. T2D is preventable and
global health organizations and governments recommend
maintaining healthy eating habits, avoiding tobacco use
and exercising adequately. Most recently, a high intake of
sugary beverages has been linked to diabetes. This is an
issue in Mexico, a country consistently ranked among the
top five worldwide for consumption of sugary beverages.
Poor disease management can trigger seizures, loss of
consciousness and diabetic ketoacidosis (KDA), which leads
to a diabetic coma in T1D and T2D. A hyperosmolar coma is
a possible complication of T2D and it carries a mortality rate
of 10-20 percent. Other major complications are blindness,
heart attacks, stroke and lower limb amputation due to poor
blood flow causing nerve damage and the development of
foot ulcers, worsening to the point of amputation. Diabetes
is also one of the main causes of kidney failure.
GESTATIONAL DIABETES (GD)
Gestational diabetes is the least well-known of the three
types of diabetes, occurring during pregnancy. It is a form
of hyperglycemia with blood sugar levels above normal
but below those of T1D or T2D. This leaves women at an
increased risk of pregnancy and delivery complications and
also increases their risk and child’s risk of developing T2D
in the future. It occurs as the body struggles to produce
enough insulin to control the increased blood sugar levels
during pregnancy and usually disappears after giving birth.
Although any woman can develop GD, certain factors
place women more at risk including obesity, previously
having given birth to a baby weighing over 4.5kg, previous
experience of GD, having a parent or sibling with diabetes
and being of South Asian, Chinese, African-Caribbean or
Middle Eastern origin.
ANALYSIS
In recent decades, diabetes has crept into people’s lives
to become a main cause of mortality in Mexico. A chronic
disease, diabetes impacts the sufferer for life and has a
variety of devastating side effects
263
Q: Lab acquisitions have helped spur GDA’s growth. What is
the strategy to integrate these labs?
A: Over the past two years GDA has acquired Olab
Diagnósticos Médicos, Laboratorios Azteca and
Laboratorio Clínico Jenner, which were the third, fourth
and fifth most important players in Mexico City and its
surrounding urban area and have made GDA the second-
largest player in the industry. GDA is now integrating the
operations of these companies, retaining the best qualities
and practices of each.
We are a multibrand group that will leverage operational
and administrative synergies to enhance the value of each of
our brands. Olab is recognized by many doctors and public
and private-sector institutions for its expertise in imaging
tests such as MRIs, tomographies, mammographies, x-rays
and ultrasounds. Azteca is well-known for its leadership in
clinical analysis, especially in forensic science and toxicology
analysis, while Jenner and Swisslab are focused on disease
prevention through clinical analysis. Although our brands have
specializations, each has medical-imaging equipment.
We will concentrate our laboratory tests and analysis in a
central location and our imaging diagnosis in a blue room, a
model that will improve the quality and reduce time during
the diagnosis process. The new 5,000m2 central laboratory
will be robotized and will provide service to our brands, clients
and other potential clients, both nationally and internationally.
We will continue to look for small to medium-size companies
that complement the group’s portfolio and we will also resume
inorganic growth during the second half of 2017 through the
expansion of our brands in Mexico City.
Q: How are these alliances impacting your operations?
A: In 2017, GDA collaborated with Grupo Diagnóstico
PROA and Laboratorio Médico Polanco to establish
the Mexican Council of Medical Diagnosis Companies
(COMED), which aims to unite all the diagnostic labs in
Mexico to help lawmakers improve current regulations.
We also want to put regulation in place to ensure
healthy competition while also organizing congresses
and symposiums to spread knowledge and best practices
in the industry. These efforts will translate into better
diagnostic services in the country.
Q: How is GDA responding to Mexico’s need for quick and
precise diagnostics?
A: The group is joining forces with international suppliers to
implement the highest available technology that will improve
diagnoses. Our blue room has the technology to conduct live
sessions between the treating doctor and our radiologists.
The platform also allows us to share images with experts
around the globe to improve the diagnosis in difficult cases.
Q: What is your strategy to put Big Data to use?
A: In this industry, Big Data applications should translate
into timely disease prevention. In this area, we would like
to cooperate with local governments and companies by
sharing all the information we gather to increase prevention.
The Ministry of Health is the appropriate entity to use this
information for the benefit of Mexican citizens. We believe
COMED will accelerate the creation of such synergies
and regulations to help the Mexican population without
threatening the privacy of our clients.
Q: What are your growth expectations for the following
five years?
A: The president of Empresas Aries drafted an aggressive
growth plan comprising organic and inorganic growth. This
is why we are building strong foundations such as our new
central lab, which will be 10 times larger than the current lab
and capable of meeting our growth needs. Our goal is to
increase our market penetration in Mexico and expand our
coverage in Latin America. To achieve this, we will open several
branches across our brands, mostly in the same markets in
which we are already present. We also have a few companies
in sight that will increase our national and regional coverage.
LAB ACQUISITIONS BOLSTER BRAND VALUE
CARLOS OVIEDODirector General of GDA
VIEW FROM THE TOP
GDA was founded in 2007 in Mexico as a private equity fund
focused on real estate and later expanded to other sectors. The
clinical diagnostics unit GDA has become a leading industry
player through various acquisitions
264
forbidden for us to write prescriptions or change
prescriptions. Many doctors recommend us, but it is
based on personal experience and merit.
Q: Mexicans are well-known for avoiding check-ups. How
does this vary with high-level executives?
A: They are more conscious of the need for check-
ups and prevention. Around two-thirds of our clients
are companies that send their top-level executives.
Many of these are only meeting a requirement of
their company and around 10-15 percent do not come
back for their results, although digital results are kept
permanently. Some companies are active in making sure
their employees do get the result and ask for statistics.
Cardiovascular diseases are the main trends. Some are
already conscious that they have an issue, others not.
Q: What strategy is behind your remodeling the Santa
Fe clinic?
A: We will be completely renewing the clinic, from the
reception to the distribution of space, and we are introducing
more tests, such as for high-performance athletes. The sports
check-up will be 100 percent focused on cardiovascular
issues and causes of sudden-death and we will bring in the
new clients through marketing. Athletes are more aware of
the importance of prevention and are concerned with their
health. This will be introduced by July 2017.
Q: How do you ensure that your doctors have the latest
knowledge?
A: Our medical director is active in making sure our doctors
stay up-to-date and take courses. We also incentivize this;
for example, our doctors have just taken a course on echo
and heart ultrasounds. Although this is usually reserved for
echo cardiographists, it is important for us because we will
be including it in our check-ups for athletes.
Q: Why is now the ideal moment for your expansion?
A: The perspective of Mexicans has changed. It is true
that Mexicans, especially the elderly, do not worry about
prevention, but young people are increasingly looking after
themselves. We expect to fill the new clinic within six months.
Q: Check-Up Center’s target clients are high-level
executives. What is your strategy to reach this target?
A: In 2017, we will be opening a new center in the upscale
Polanco neighborhood of Mexico City, although it has
been delayed by the remodeling of our center in the Santa
Fe business district. Check-Up Center has been in the
market for 15 years and was the first in Mexico to merge
a full-body scan through computerized tomography with
a traditional check-up.
We renew most equipment every two to three years and
tomography machines every five years. We renew with
such frequency to also be at the height of innovation.
In addition, all our studies are non-invasive. Take the
example of rectal sigmoidoscopy, part of a colonoscopy.
Only 5 percent of the population really needs this. We use
our studies to determine whether a patient is a potential
candidate for a full colonoscopy or not, limiting the
invasiveness of the procedure.
Q: To what extent do you consider other clinics as your
competitors?
A: We only consider the two largest hospital chains as
our competitors due to target clients and the quality of
their studies. Our doctors are experts in imagology and
our labs are managed by Quest Diagnostics, the largest
diagnostics lab company in the world. It has the highest
quality in Mexico and no one else reaches its standards.
The tests are carried out in only two hours and the results
are returned within a week. We obtain much more medical
information than standard check-ups.
Q: To what extent do you have partnerships with clinics
to refer patients if they have an issue?
A: We only produce diagnostics, we do not recommend
anyone and we do not perform any treatment. It is
REGULAR DIAGNOSTICS KEY TO GOOD HEALTHJULIÁN GONZÁLEZDirector General of Check-Up Center
VIEW FROM THE TOP
Check-Up Center has been providing preventive diagnostics
for 15 years in exclusive locations in Mexico City. It aims to
provide a full check-up in two hours, using the most up-to-
date technology on the market
265
volumes to achieve more efficient clinical diagnosis. We
lead the automation market for Mexican public and
private laboratories. In fact, we are the medical devices
manufacturer with the most automatized laboratory
installations in the market. When a sample tube arrives
to the lab, the process is automated from the beginning
to when the final result is obtained. All this is possible
through our working methodology, the Danaher Business
System, which applies the Kaizen methodology or the
continuous improvement ideal to make processes more
efficient. Besides our quality products and solutions, we
transfer this methodology to our clients to help them
achieve their objectives.
Q: You recently bought the clinical microbiology business
from Siemens Healthineers. How has this shaped your
plans?
A: It has been an interesting opportunity that has enabled
us to expand into an area in which we had minimal
activity. Microbiology has become very important for
us. In five years we have gone from having a strong
business in hematology, immunoassays and clinical
chemistry, to expanding to microbiology and urinalysis.
All the acquisitions we have made are investments with
the purpose of creating a bigger value proposition for
our laboratory partners and our commercial partners.
Q: What new technologies and tests have you integrated?
A: We have two new tests: P2PSA for men and
antimullerian hormone for women. The latter helps women
identify where they are in their reproductive age. The
time frames of human reproduction have changed greatly
and this solution is helpful for women who postpone their
maternal stage due to their professional life. The P2PSA
evaluates prostate health according to the prostate health
index, improving prostate cancer diagnosis.
Q: How has Beckman Coulter adapted its solutions
portfolio to Mexico?
A: In Mexico, our solutions help health professionals to
deliver earlier diagnosis and more precise treatments.
We have solutions for immunology, clinical chemistry,
hematology, microbiology and urinalysis. Our products
simplify, automate and innovate complex biomedical
testing. In the microbiology field we developed cultures
to identify what type of microorganisms are affecting
the patient and which is the best treatment to eliminate
the infection. Overall, we have a complete portfolio for
diagnosis and technology for medium-sized laboratories
and we offer automatization for central laboratories that
deal with high volume.
Mexico belongs to what we call high-growth markets
and it is our main office in Latin America. We have been
here for a long time so we adapted our proposal to the
market’s needs. We have created a value proposition
for both the public and the private sector and we have
established strategic relations with other companies to
reach our final clients. Our equipment and instruments
have provided our clients with efficient results so they feel
safe working with us. Also, this success was led by our
highly qualified team in the commercial and engineering
sectors, which is our main differentiator.
Q: What type of customers are driving Beckman Coulter’s
growth in Mexico?
A: In Mexico, the market is segmented into the private and
the public sector. A larger volume is sold to the public sector
through IMSS, Seguro Popular, ISSSTE and the Ministry of
Health. Our sales to the private sector are also growing
through the establishment of reference laboratories. We
are offering the private sector solutions that allow them to
handle more test volume.
In the public sector, we work with our network of
authorized distributors, with whom we decide which
government tenders to participate in. We cannot
always participate in all those we would like to, but the
government is starting to consolidate and purchase larger
DIAGNOSING GROWTH OPPORTUNITIES
SERGIO BROWNVice President LATAM of Beckman Coulter and Director of Danaher LATAM
VIEW FROM THE TOP
Beckman Coulter is an American manufacturer of analytical and
diagnostic solutions. It merged with US-based Danaher, which
owns innovation companies focused on testing and measurement
in several sectors, including life sciences and dental
266
INFOGRAPHIC
61.3%
67.3%
42.3%
51.4%
80%
76.6%
48.4%
6.7%
76.3%
44.6%
OBESITY: A GROWING PROBLEM
The statistics tell a convincing tale, even if the people
disagree: despite high overweight and obesity rates
and low rates of fruit and vegetable consumption, in
a self-evaluation the Mexican population reports lower
rates of excess bodyweight and higher rates of healthy
eating, in addition to not understanding food labeling and
dietary requirements. These statistics show
that Mexicans do not know what their ideal
weight range is, nor when they step over it,
and demonstrates the state of confusion in
which the Mexican population resides and
the need for better diffusion of clearer information from
the health authorities. In addition to unhealthy eating,
the population suffers from a range of other influential
factors such as lack of sleep or insomnia and long work
hours which contribute to sedentarism and leave little
time for exercise and healthy living.
� Obesity
� Overweight
� Obesity
� Overweight
28.4 percentreported sleeping less than seven hours. Insomnia (classed as difficulty in sleeping at least three days per week) affects almost a fifth of the population, mostly women.
2/3 of Mexicansreport watching TV in the hour before
going to sleep.
There is no escaping the health problems being overweight or
obese cause, especially as almost three of every four Mexicans
fall into one of these two categories. Yet these conditions cannot
be solved with a pill and require profound behavioral change
considers they have a healthy diet
considers themselves to be physically active
regularly consumes vegetables
regularly consumes fruit
considers themselves capable of eating five or more portions of fruit or vegetables per day
of the population suffers from abdominal obesity
considers themselves overweight
considers themselves obese
does not know how many calories one should consume in a day
reports that nutritional labelling on food is little comprehensible or incomprehensible
OF MEXICAN ADULTS
OF MEXICAN ADULTS AGED OVER 20
OVERWEIGHT OR OBESE PER AGE RANGE IN MEXICO (percent)
Source: ENSANUT 2016
72.5%Overweight
or obese
76.6%Abdominally
obese
0
20
40
60
80
100
adultsover 20
teenagers12 to 19
children5 to 11
GENDER COMPARISON OF OVERWEIGHT AND OBESITY IN MEXICAN CHILDREN (percent)
0
10
20
30
40
Five to 11years old
12 to 19years old
Girls Boys
267
Q: Overweight and obesity was declared an epidemic in
Mexico in late 2016. How has this impacted your operations?
A: We have been focused on this problem for many years,
but having overweight and obesity declared an epidemic
helps us with the diffusion of knowledge because it
generates a higher consciousness that it is a problem, a
chronic disease. When the company was first founded,
obesity was not seen as an epidemic but as an aesthetic
problem. We must still figure out how to face this and
how to reduce prevalence rates. Mexico has done a
great job in generating consciousness, due in part to the
government’s sponsorship of a large number of campaigns,
although there is still a great deal of work to do. Habits
need to change, which is difficult. Education also plays an
important role. Overweight and obesity in children is more
serious than these issues in the general population, yet,
children suffering from these problems almost certainly will
continue to do so in adulthood. Childhood overweight and
obesity is also more difficult to solve because they are still
growing, so restricting nutrition is not as simple as in adults.
Despite the declaration having awoken consciousness, the
solution remains a puzzle.
Q: The ENSANUT 2016 results show overweight and
obesity is considered a problem for other people. How is
Medix addressing this?
A: ENSANUT 2016 was representative of how people
see themselves versus how they are. There are two ways
of convincing people they have a problem. The health
side is more complicated, as often people do not feel ill.
By posing overweight and obesity as a health problem,
people do not identify with this. We have taken a different
approach, focusing on aesthetics and wellbeing. We ask
patients if they would like to change their image. If we
ask what a person’s goal is, perhaps to play football with
their children or go camping, but they are generally too
tired to do so, this could be a target. Among people who
are trying to lose weight, 70 percent are doing it for
image and 30 percent for health. We help people reach
their goals safely, which is vital. To drop a large amount
of weight quickly is bad for one’s health and in the long-
term, the body responds negatively to this.
MEXICO'S ONGOING ISSUECARLOS LÓPEZ
Director General of Medix
Q: What are your priorities for 2017?
A: For both 2017 and 2018, we will be focusing on
increasing sales. We grew by 7 percent in 2016 despite
uncertain global conditions. Our target is 20 percent
growth in sales in 2017 and we also want to maintain a
profitable model that satisfies shareholders as well as
employees. In addition, Medix will be working on the
consolidation of its model and expanding sales channels.
Database and knowledge integration will be improved to
offer more options in the future, factoring in Big Data.
Medix is working on a geographical expansion to have
an important impact on the health of other countries. We
are the biggest company offering obesity solutions in
Mexico and we want to achieve this in Latin America too.
Q: Does that expansion plan also include acquisitions?
A: We are pursuing businesses in Chile, Bolivia, Uruguay,
Peru, Colombia and Europe. Our strategy is to build
partnerships with major market players in each country,
not only in the pharmaceutical sector but in logistics and
distribution as well. We are always looking for opportunities
to expand our product portfolios in the markets in which
we are already present. In addition, Medix is working
on an e-learning project with the objective of creating
an overweight and obesity community across different
countries, with specialists who can share experiences and
knowledge in this field.
VIEW FROM THE TOP
Medix has been dedicated to the fight against overweight and
obesity since its inception in 1940, providing integral solutions
in 11 countries with the goal of diminishing the impact of these
conditions
“Among people who are trying to lose
weight, 70 percent are doing it for image and 30 percent for health”
268
Nemocast 3D is only one of several software applications
developed by our partner NemoTec that we use, all
deal with diagnoses and treatment planning. Nemotec
software has helped develop this new business model and
35 percent of our platform is based on their technology.
Q: How important is innovation to the success of
Borgatta’s business?
A: Companies that want to be profitable must stay up-
to-date or they will not remain in the market. Innovation
must be in your DNA and focused on the customer’s
needs. At Borgatta, we understand this and seek to
develop simple and useful solutions for our clients.
Q: In the past you have stated that customers today have
more information. How does this impact the industry?
A: It has both a good and an adverse impact. Good
because they look for information and adverse because the
information they obtain is not always correct. In this respect,
the orthodontist plays an important role because he will be
the first to provide the patient with professional advice.
Q: What role will Borgatta’s plant in Ixtapaluca play in
the company’s growth plans?
A: We import all orthodontics products such as movement
tools from different countries: the US, Japan, Korea and
Brazil, among others. We produce radiography machines
at international quality levels and export them. Recently,
we received FDA approval to export to the US.
Q: What is the average time required to obtain a sanitary
registration?
A: It depends on the class of the device. On average, a
class II dental-device registration takes six months when
all documents are on hand and a class III takes about
nine months.
Q: What are the company’s priorities for 2017-2018?
A: We have an obligation to understand market
tendencies and stay updated. We need to be able to offer
our customers and the market whatever solutions are
required to meet the latest trends.
Q: How does Borgatta’s app contribute to improving
healthcare?
A: As with any medical specialization, orthodontics
is influenced by technology and today diagnoses are
largely supported by technological tools such as 3D
images. Once the diagnoses are done, a treatment plan is
developed and executed based on images and software.
This eases the work of the physician and clearly shows
the patient what the treatment will be and the results.
The information can be illustrated with an interactive
app. This is the future of orthodontics and 90 percent
of what we do.
Q: What is Borgatta doing to raise awareness of the
importance of dental health among patients?
A: As a company, we are not only a supplier of materials
but we also focus on continuous education through
courses, bringing scholars from different parts of Latin
America, supporting local researchers and working with
universities. We also advertise to patients to create
awareness on how there is more to orthodontics than
aesthetics. Borgatta wants to support both physicians
and educational centers because this industry has the
heaviest impact on most medical practices.
Q: What are the most signifianct dental trends?
A: The most common problems are related to poor dental
hygiene and the subsequent problems. Issues related to
prevention, which generally are mismanaged, especially
in government programs, are also near the top of the list.
The tendencies include diagnosing based on 3D images,
shortening the treatments using latest generation tools
and invisible dental correction. However, only a small
percent of our business is based on prevention. In the
pharma division for example, we develop fluorides that
are used to make children’s dental enamel more resistant.
INNOVATION, DIGITAL PUSHING DENTAL HEALTHJUAN CARLOS BORGATTADirector General of Borgatta
VIEW FROM THE TOP
Borgatta is a Mexican company established in 1973 by
founder Juan Carlos Borgatta with the aim of supporting
dental professionals and preserving oral healthcare through
high-technology products
269
need new technology to detect cases early. The results will
be published in the Mexican Society Journal at the end of
2017 and it will provide useful information for the future.
Q: What differences do you see in patients based on
age, socio-economic background and urban versus rural
inhabitants?
A: The social distribution of ages is changing in Mexico. The
population now lives longer and we are seeing diseases
that present themselves later on in life, such as macular
degeneration. Although the prevalence of glaucoma is 5
percent at 40, at 70 it is 18 percent and above that it rises
to 30-35 percent. Like glaucoma, macular degeneration must
be detected early because the impact is irreversible. Diabetic
retinopathy is common due to the big diabetes problem in
Mexico and occurs in both T1D and T2D. It also requires early
diagnosis to stop the progression of problems in the retina.
Q: What are the most challenging conditions you have faced?
A: The most challenging cases are those that go to the
foundation Ojos para México at late stages of a disease, as
there is not much we can do for them. The eye is already taken
by the disease and most cells cannot be replaced. However,
we are working on a stem cell treatment to find a solution for
these challenging cases. Perhaps we will be able to help them
with stem cells in the future.
Q: What are your ambitions for 2017 and how do you aim
to achieve them?
A: In 2017 we would like to see our own institute of
ophthalmology to provide all services in one place, with
research in the building. We will be able to take new advances
right from the bench to the patient’s bedside. We will also be
offering surgery in 2017 with the Barraquer Ophthalmology
Center. Spanish doctors will be visiting us to participate in
cataract surgeries and to share their experiences with us.
Q: What are the main trends in ocular health you have
observed over the past year?
A: One of the main concerns in Mexico is cataract. When
we provide cataract surgery, we are putting workers back
into the economy. Mexico needs this. There is a significant
problem in Mexico regarding ocular health because there are
instances in which national health institutions cannot provide
the services needed. This is an opportunity for organizations
like Ojos Para México to collaborate with those institutions
to bring the latest advances in ophthalmological technology
to people in Mexico.
Q: How much of a priority is cataract surgery for the
public sector?
A: It is a top priority, followed by glaucoma, because if it is
not detected in time, it leads to problems that are irreversible.
We are working with the University of Monterrey (UDEM)
to develop a system for the early detection of glaucoma,
so it can be treated and the ocular health of this segment
of the population can be preserved. We have calculated
the economic impact of primary open angle glaucoma in
Mexico and the numbers are extremely high [potentially
US$659 million per year, according to an article published
by Villarreal et al in the Revista Mexicana de Oftalmología].
Through this detection system, we are trying to minimize
the efforts and costs required at the federal level.
Q: What percentage of issues is genetic versus
environmental? How does the diagnostics and treatment
differ between them?
A: Through a protocol carried out at the University of
Monterrey, we discovered that the prevalence of glaucoma
in people aged over 40 in Mexico is 5 percent but 95
percent of that 5 percent was unaware of their condition,
as it does not produce any pain. Once the patient notices
sight loss, it is too late and the disease is in an advanced
stage. In addition, 95 percent of those 5 percent did not
suffer from high intraocular pressure. This means there is
another key factor for the appearance of glaucoma but we
are still trying to find out what it is. We also found that
the best way to detect these cases was not pressure, so
we conducted another test and we are concluding that we
A BRIGHT FUTURE FOR MEXICOROGELIO VILLARREAL
Director General of Centro de Oftalmología Monterrey and Ojos Para México Foundation
VIEW FROM THE TOP
Centro de Oftalmología Monterrey is a leading ophthalmological
clinic in Monterrey, Mexico. It treats a large number of patients
from abroad with its cutting-edge techniques and performs
research with stem cells
270
CANCER A TOP KILLER AMONG MEN AND WOMEN
American Cancer Society reports that symptoms
often appear in later stages of the disease,
meaning later diagnoses and lower survival rates.
The most common risk factor for liver cancer
is chronic hepatitis B or hepatitis C infection.
Other risk factors include liver damage caused by alcoholism,
obesity and T2D, according to the ACA.
LIVER AND BILIARY PASSAGES CANCER
In many countries biliary cancer is considered uncommon. It
was the eighth most common cancer in US men in 2014, 11th in
UK men in 2013, ninth in Argentinian men in 2014 and seventh
in Brazilian men in the same year. It is usually found more
commonly in South-East Asian countries; for example, it killed
the second most number of men in Singapore in 2014 and the
Philippines in 2011. There are three types of bile duct cancer:
intrahepatic, perihilar and distal, the latter two of which are
classed as extrahepatic.
Bile duct cancer is particularly nasty. According to the
American Cancer Society, the five-year survival rate for
localized or stage I extrahepatic bile duct cancer is 30
percent, 24 percent for regional (stage II and III) and a mere 2
percent for distant or stage IV extrahepatic bile duct cancer.
For intrahepatic bile duct cancer, the five-year survival rates
are even lower. There is only a 15 percent chance for stage
I, 6 percent for stage II and III and again only 2 percent for
stage IV, according to the ACA.
LUNG CANCER
Worldwide, lung is the second most common cancer
behind prostate for men and breast for women. Lung
cancer is split into three main types: nonsmall cell, small
cell and lung carcinoid or lung neuroendocrine tumor. The
ACA reports that about 85 percent are nonsmall cell, 10-
15 percent are small cell and less than 5 percent are lung
carcinoid tumors.
The main risk factors for lung cancer are environmental:
tobacco, radon, asbestos and diesel exhaust. Although
tobacco use is the main risk factor, over 40,000 cases of
lung cancer are diagnosed annually in nonsmokers. Black
men and white women are the groups most at risk.
PROSTATE CANCER
Prostate cancer is one of the cancers that most affects
men worldwide and is the most common cancer in men in
Mexico. There are several types of prostate cancers though
most are adenocarcinomas. Links between prostatic
While genetic and environmental factors are known to be
involved in cancer, science has not yet pegged a specific
cause for specific cancers. According to the WHO, 30
percent of deaths caused by cancers can be traced back
to five factors: high BMI, insufficient fruit and vegetable
intake, lack of physical activity, alcohol consumption and
tobacco use.
The top five killer cancers differ per gender and per country.
For Mexican men, prostate, lung, liver & biliary passages,
stomach and liver are the deadliest. For Mexican women,
breast, uterus, liver & biliary passages, cervix uteri and liver
are the main killers. Treatment is continually improving and,
as a result, survival rates have and are continuing to improve.
These are the main risk factors and survival rates of the
cancers that most affect Mexicans.
BREAST CANCER
Breast cancer campaigns and news have taken over the
health media in recent years. There are more and more drugs
being released to treat the condition and survival rates are
high. The five-year relative survival rate for those diagnosed
with stage I breast cancer is almost 100 percent. Even at
stage III, the survival rate is 72 percent, according to the
American Cancer Association (ACA).
CERVIX UTERI CANCER
More commonly known as cervical cancer, this develops in
the lower part of the uterus in the area where the cervix and
the exocervix meet. Most of these cancers are squamous cell
carcinomas, meaning they evolve from skin cells, according to
the ACA. HPV is associated with this disease, so vaccination is
highly recommended to avoid contracting it and subsequently
later developing cervical cancer. Although rates have dropped
in countries with high levels of vaccination, it perseveres in
Mexico due to a cultural stigma of the vaccination, leading
some parents to refuse vaccination of their children. This
cancer is easily detectable through pap smears, although
this requires adequate access to healthcare services, which
remains a challenge in some parts of Mexico.
LIVER CANCER
Although there are several types of liver cancer, the most
common type is hepatocellular carcinoma (HCC). The
ANALYSIS
Cancer rates have increased dramatically in past decades, first
appearing in the top 10 causes of death in Mexico in the 1960s.
Today, cancer, cardiovascular disease and diabetes are three
of the biggest and most-feared killers worldwide
271
a diet rich in smoked and salted foods, tobacco use and
obesity. People with type A blood also have a higher risk of
developing stomach cancer for reasons yet unknown.
The five-year survival rate for stomach cancers detected
in stage IA is 71 percent, according to the ACA, although
this drops rapidly through the stages. The overall, relative
survival rate of stomach cancer is 29 percent.
UTERUS CANCER
According to the Canadian Cancer Society, most uterine
cancers are endometrial carcinomas, whereas only a small
percentage are uterine sarcomas. It is the second most
common cancer in women in Mexico, although it is most
common in Caucasian and post-menopausal women. Other
risk factors include being overweight, never having given
birth, diabetes and endometrial hyperplasia.
intraepithelial neoplasia (PIN) and atypical small acinar
proliferation (ASAP) with prostate cancer are under study.
The risk of prostate cancer is relatively high. The ACA
explains that around one in seven men will contract
prostate cancer in their lifetimes and around one in 39 will
die from it. It mostly affects older men, with the average
age of contraction at 66. The five-year survival rates are
equally high, with a rate of almost 100 percent for men
with prostate cancers in local and regional stages. This
drops to 28 percent for distant stage cancers, once again
highlighting the importance of early diagnosis.
STOMACH CANCER
Most stomach or gastric cancers are adenocarcinomas:
cancers that start from the cells that line the stomach. The
most associated risk factors are helicobacter pylori infection,
MALE AND FEMALE CANCER DEATHS PER YEAR IN MEXICO (thousands)
Source: WHO database, 2014 data (latest available figures)
1 2 3 4 5 6 7 8
Nasopharynx
Mesothelioma
Thyroid
Hodgkin lymphoma
Melanoma of skin
Testis
Multiple myeloma
Rectum and anus
Gallbladder
Larynx
Bladder
Lip, oral cavity and pharynx
Oesophagus
Brain, central nervous system
Kidney
Non-Hodgkin lymphoma
Pancreas
Colon
Lip, oral cavity, pharynx, larynx and oesophagus
Leukaemia
Colon, rectum and anus
Intestine
Liver
Stomach
Liver & biliary passages
Lung
Prostate
8 7 6 5 4 3 2 1 0
Nasopharynx
Mesothelioma
Larynx
Hodgkin lymphoma
Oesophagus
Melanoma of skin
Bladder
Lip, oral cavity and pharynx
Rectum and anus
Thyroid
Multiple myeloma
Corpus uteri
Lip, oral cavity, pharynx, larynx and oesophagus
Kidney
Brain, central nervous system
Non-Hodgkin lymphoma
Gallbladder
Leukaemia
Colon
Pancreas
Ovary
Lung
Colon, rectum and anus
Intestine
Stomach
Liver
Cervix uteri
Liver & biliary passages
Uterus
Breast
BLOOD, CNS, BONE
the 3 most common cancers in children
49,416people were treated for breast cancer in IMSS in 2015
272
2016); monitoring clinical treatment outcomes by
introducing arthroplasty registers (Gliklich et al., 2014);
assessing HRMD risk through post-market due diligence
programmes (ODEP, 2015); classifying implant quality
(Poolman et al., 2015) and establishing revision rate
benchmarks to prevent the use of poorly performing
implants (NICE, 2014). These strategies are frequently
integrated into regulators’ work and help bridge the gap
of evidence and uncertainty (Wilkinson and Crosbie, 2016,
Randall, 1997).
EPIDEMIOLOGY OF JOINT REPLACEMENTS
Joint replacements in Mexico will increase and life
expectancy may be an important indicator for the
development of joint replacement demand. In Mexico, life
expectancy has improved over the past 15 years (OECD,
2016a), the incidence of osteoarthritis increases rapidly
in patients over 50 (Hooper et al., 2014) and in obese
populations (Kulkarni et al., 2016), which is a serious
health burden in Mexico (OECD, 2016b). Patients who
have already received a joint replacement are exposed
to revision surgery by the increase in years since primary
surgery took place.
The clinical long-term performance of HRMD is an
important input parameter for decision-making because
it determines the future need of revision surgery. Many
countries have access to high-quality data on joint
replacements, which they use to evaluate medical
outcomes (Gliklich et al., 2014, Herberts and Malchau,
2000, EAR, 2016). Using poorly performing medical
devices is one of the reasons for high revision rates. For
instance, increased incidence of post-operative problems
resulting from the use of metal-on-metal hips led to
higher hip revision rates (FDA, 2014). However, in Mexico
medical device regulation does not include clinical long-
term performance of HRMD in their quality agenda with
exception of the federal techno-vigilance department and
health technology assessments, the findings of which are
used to include technologies on the National Formulary.
Between 2014 and 2015, researchers from the Swiss
Tropical and Public Health Institute, UNAM and the INSP
Studies concerned with the epidemiology of hip and knee
joint replacements show that the demand for primary
joint replacements and revision surgery is growing (Patel
et al., 2015, CDCP, 2009). To control the financial impact
of joint replacement, it is important to achieve good
implant survival rates because the health expenditures
of revision surgery are significantly higher than primary
joint replacement (Kandala et al., 2015). Arthroplasty
register data shows that the clinical performance of
hip and knee implants in the long-term demonstrates
a strong variation (Herberts and Malchau, 2000). Using
poorly performing implants increases the revision risk.
Yet, little is known about health policies encompassing
strategies to decrease the use of poorly performing
hip and knee implants. The objective of this study is to
analyse the contribution of survival rate benchmarks as
recommendations for decision-making and to discuss the
health economic contribution of introducing survival rate
benchmarks in Mexico.
ISSUES RELATED TO ORTHOPEDIC HIGH-RISK
MEDICAL DEVICES
Medical device regulation is challenged with the mismatch
of the information validity needed for market approval
and evidence from actual use of high-risk medical devices
(HRMD) (Reynolds et al., 2014, Kramer et al., 2012,
Tarricone et al., 2014, WHO, 2010). One reason for this is
that premarket regulation is mainly based on conformity
assessments and does not include findings from clinical
long-term outcome studies (Tarricone et al., 2014, Ciani
et al., 2015). HRMDs are implanted in the human body and
are therefore recommended, subject to the highest level
of premarket and post-market regulation (FDA, 2017).
Policymakers from other countries such as the UK,
Germany, Switzerland and the Netherlands are frequently
concerned by effectively ensuring standards of clinical
safety, performance and efficacy of HRMD (Lauer et
al., 2014, Sorenson and Drummond, 2014). Countries
use different strategies to ensure or monitor safety and
performance of medical devices such as strengthening
post-market regulation (Duke-University, 2016, FDA,
SURVIVAL RATES: AN OPPORTUNITY TO IMPROVE ORTHOPEDICSMYRIAM LINGGPh.D. candidate at the Swiss Tropical and Public Health Institute
and the University of Basel
EXPERT OPINION
273
2015). For instance, these are used in the UK and they
are important in the regulation of HRMD, used to improve
outcomes. The National Institute for Health and Care
Excellence (NICE) defines recommendations including
benchmarks for the quality of hip prostheses for example,
as “the new joint should work well in at least 95 percent of
hip replacements over 10 years, instead of the current 90
percent” (NICE, 2014). This is an important contribution
to decision-making processes because it suggests that
decision makers should thoroughly review all available
evidence.
In Mexico, no data is available on national implant survival
rates. However, policymakers in Mexico could introduce
such benchmarks and request decision-makers consult
survival rate data from countries with an arthroplasty
register or consult the findings of risk assessment
programmes as they are used in the Netherlands or the
UK (Poolman et al., 2015, ODEP, 2015).
IMPACT OF BENCHMARKS
The use of survival rate benchmarks may have a positive
impact on orthopedic revision rates and their financial
burden. Introducing these survival rate benchmarks may
improve the eligibility of medical devices, strengthen
quality assurance and enhance organisational governance.
The Mexican health system lacks high-quality data for
orthopaedic surgeries. However, average survival rates
from different arthroplasty registries could be used as
reference instead. Economic analysis in orthopaedics
provides a powerful tool for the evaluation of healthcare
technologies and treatment strategies (Bozic et al., 2003).
More research analysing the potential financial impact of
using survival rate benchmarks may provide important
findings. In the case of Mexico, even though no high-
quality data is available, sufficient information of implants
purchased in the past is publically available. It is stored at
the electronic contracting system Compranet of Mexico.
To apply economic analysis, the data from Compranet
and average survival rates from different arthroplasty
registries could be used.
conducted studies in Mexico on the regulation, assessment
and management of orthopaedic HRMD (Lingg et al.,
2016a, Lingg et al., 2016b, Lingg et al., 2017a, Lingg et al.,
2017b). These studies showed quality concerns related to
post-market regulation and procurement of orthopaedic
HRMD. In Mexico, several governmental offices as well
as a number of non-governmental stakeholders are
involved in the regulation, assessment and management
of medical devices. Nevertheless, reviewing articles 83,
179 and 180 of the Medical Device Regulation of Mexico
shows that there are no specific regulations for HRMD
differentiating them from lower risk medical devices.
Further, before 2016, HRMDs were included together with
other medical devices in a general standard list (Standard
List for Medical Care Products).
POLICY IMPLICATIONS
In health systems, decision-making takes place at different
levels of healthcare delivery to allocate limited resources
optimally (Schöffski and Graf v. d. Schulenburg, 2008).
Health economic analysis significantly contributes to this
and encompasses important perspectives to attribute cost
and benefit to specific healthcare provisions. Economic
costs for joint replacements are high (Hiligsmann et al.,
2013) and are differentiated into direct costs (hospital
admissions, medical examinations, drug therapy), indirect
costs (losses in productivity resulting from absence
from work) and intangible costs (Schöffski and Graf v. d.
Schulenburg, 2008). The direct costs associated with joint
replacements are high and driven by the cost of surgery,
hospitalization and rehabilitation. Different methods are
available to conduct health economic evaluations based
on specific health economic principles that inform policy
decisions, encompassing the efficiency and effectiveness
of medical treatments (Breyer et al., 2004).
At the policy level, health economic analysis is globally
increasingly taken into consideration. For instance, health
technology assessments are a form of policy research
that seeks to inform policy makers about the clinical and
economic value of health technologies such as medical
devices and includes findings derived from results of health
economic analysis (Banta, 2009, WHO, 2011). Further, in
orthopaedics health economic analysis increasingly receives
more attention due to its financial impact (Haentjens and
Annemans, 2003). It is an essential element in decision-
making and HTAs at purchasing decision-level are
increasingly discussed (McGregor and Brophy, 2005,
Kidholm et al., 2009, Ehlers et al., 2006, Sampietro-Colom
et al., 2012) and supported by policy-makers.
SURVIVAL RATE BENCHMARKS
A promising strategy to ensure quality is to implement
guidance for survival rate benchmarks (Kandala et al.,
Joint replacements in Mexico will increase and life expectancy may be an indicator for joint replacement demand
274
SUCCESS OF 90-90-90 AIDS PROGRAM REQUIRES 20/20 VISION
The UN estimates that about 37 million people worldwide
are living with HIV/AIDS, 1.8 million of which are children. Its
analysts peg the number of people that have been affected
by HIV worldwide since the beginning of the endemia in June
1981 to 2015 at 69.5 – 87.6 million and put the number of
people that have died from AIDS-related illnesses at 29.6-
40.8 million.
In 2015, there were around 2 million people living with
HIV in Latin America, according to the UN. An estimated
100,000 new infections occurred during the year in the
region, a number that has not varied between 2010 and
2015. It is probable that 2,100 of these newly infected are
children under the age of 14. Just over half are thought
to be receiving treatment, as 1.1 million of these are
accessing antiretroviral therapy (ART). ART is not a cure
but it can help manage the condition as it controls viral
replication within a person’s body, allowing a person’s
immune system to strengthen itself and fight off any
infections that could otherwise be deadly.
HIV was responsible for 4,811 deaths in 2014 in Mexico, making
it the 16th prevailing cause of death, according to INEGI. It
was the 14th cause of death in men, responsible for 3,893
deaths, and 17th in women, linked to 918 deaths. UNAIDS
estimates 4,000 deaths in Mexico related to AIDS for 2015.
Worldwide, the main cause of death for people living with
HIV is tuberculosis, which is also responsible for one in three
deaths of AIDS sufferers in 2015, according to the UN.
On World AIDS Day 2014, 20 years after the original
Paris Declaration in 1994, UNAIDS brought together city
mayors from around the world to sign the 2014 Paris
Declaration. The signature of this declaration was a
commitment to putting their cities on a fast-track and
achieving 90-90-90 by 2020, meaning 90 percent of
people living with HIV will know they have the virus, 90
percent of whom will be on ART and 90 percent of those
will achieve viral suppression, which will reduce the risk of
transmission. Reaching this target is estimated to prevent
almost 28 million new HIV infections and 21 million deaths
by 2030.
Mexico City is among the cities that signed up the Fast-Track
Cities initiative. In addition to the 90-90-90 objectives, the
Fast-Track Cities commit to eliminating the AIDS
threat in their cities by 2030, rapidly reducing
the number of HIV/AIDS related deaths.
The WHO recommends six types of prevention.
The first is the consistent use of condoms, which have an
85 percent or greater chance of preventing infection. It is
also wise to test for HIV, STIs and TB, as it is the leading
cause of death for HIV sufferers. In addition, medical male
circumcision reduces the risk of heterosexually acquired HIV
infection in men by 60 percent. The WHO also recommends
ART in uninfected people with a HIV-infected partner to
reduce transmission, within 72 hours of exposure to HIV
and ART for pregnant women to reduce mother to child
transmission (MTCT). MTCT occurs in 15-45 percent of
untreated pregnant women. In the case of ART through
infectious stages, MTCT is almost eliminated, according to
the WHO. UNAIDS estimated that 77 percent of pregnant
women living with HIV received ART in 2015.
ANALYSIS
IN LATIN AMERICA IN 2016
Source: UNAIDS
2 millionpeople were living
with HIV
41%virtually
suppressed the virus
50,000AIDS related deaths
74%know their
status
0.5%adult HIV prevelance
55%taking ARVs
100,000new infections
Although human Immunodeficiency Virus (HIV) and
Autoimmune Deficiency Syndrome (AIDS) may not seem
commonplace, these two diseases remain a reality for
millions around the world
275
INSIGHT
After 23 years supporting professionals in the Mexican
healthcare system, COMOP continues to invest in research
on osteoporosis that could lead to a change of model in
the prevention and treatment of chronic diseases. “Our goal
is to evolve the high-level training of health professionals.
We do not just aim for a scientific proposal but also for an
impact on daily life,” says Juan Tamayo, CEO of the Mexican
Committee for the Prevention of Osteoporosis (COMOP).
According to the Mexican Association for Bone and Mineral
Metabolism (AMMOM), 18 percent of Mexican women and 8
percent of men above the age of 50 suffer from osteoporosis.
Data collected by the International Osteoporosis Foundation
shows the probabilities of suffering a hip fracture after the
age of 50 is one in every 12 women and one in every 20 men.
Considering this panorama, COMOP has been working on
the development of three lines of research.
The first is to research the results of an ongoing study of
mothers and their children started 20 years ago by the
National Public Health Institute and the Perinatology
Institute. These children, Tamayo explains, were born after
less than 38 weeks of gestation, weighed less than 3kg and
with a height under 50cm. As such they were more likely
to suffer from bad bone health and chronic diseases like
diabetes and obesity. In Mexico, the purpose of looking
at the results of this study is to gather information on
the behavior of the skeletal health of these children as
they grew and to determine how lifestyle can influence
development. COMOP has allied with other institutions
to analyze the data. “We are in contact with Mount Sinai
Hospital in New York, the University of Michigan and the
University of Toronto. Together, we will collaborate by taking
our program to a more operative level to collect information
from 100 multidisciplinary centers,” adds Tamayo.
A second line of research has followed 550 children for 15
years who were born with low stature and weak bones due
to genetic conditions that make them prone to develop
cardiovascular diseases and diabetes. “The purpose of this
research is to prevent those children from growing at a low
weight and with weak bones by encouraging healthy habits
and by providing nutritional supplements. When they reach
the age of 20, we will see if this had an impact. If it does,
this would be extraordinary because these are measures
you can apply to all social sectors,” says Tamayo.
The third line of research focuses on the role of exercise in
children born with weak bones and muscles to prevent the
development of osteoporosis. Promoting a healthy lifestyle is
a national priority since Mexico, according to the WHO, ranks
first in childhood obesity, with a penetration of 35 percent in
children and in teenagers. As Tamayo explains the bottom
line of the three lines of research is to prove that despite the
genetic predisposition with which some children are born
with, an early intervention of adequate nutrition and exercise
leads to strong, tall and healthy children.
Experts believe that osteoporosis originates in the first
1,000 days of life, Tamayo says. “Today, we can identify
children who will have weak bones before age of two. ”The
research will help COMOP develop a new model of care
among health professionals that considers more factors
during a child’s growth to create a Big Data-based platform
that doctors can use. The objective of creating a program
that collects all this data is to create a primary preventive
measure for osteoporosis can be applied in the first 40 years
of life, says Tamayo. A second prevention wave, he adds, can
be carried out between 20 years and the first fracture and
consists of applying a combined diagnostic technique of
skeletal sonometry and densitometry offered by COMOP’s
private brand for the diagnosis of osteoporosis, Oseograph.
The third approach is to provide aid in case of a fracture.
COMOP also focuses on promoting research and preserving
evidence to develop online training courses to inform and
update physicians in new diagnoses and preventive trends.
“We need to have credibility, so that those who take courses
with us recognize we are training them in something that
will help them in practice and that will give them the tools
and knowledge necessary to tackle the problem.”
Besides COMOP, Tamayo leads Accessalud, an institution
dedicated to treating chronic diseases.
START EARLY TO PREVENT OSTEOPOROSIS
JUAN TAMAYOCEO of COMOP
276
MULTIDISCIPLINARY PROGRAM NEEDED TO REDUCE CC NUMBERS
One in 10 cancer-related deaths in Mexican women is
caused by cervical cancer (CC), which kills 11 women every
day, according to the Mexican Ministry of Health. While in
2006 breast cancer replaced CC as the first cause of death
by cancer in Mexican women, according to INEGI, CC killed
4,009 women in 2015. The highest mortality rates belong
to the states of Morelos, Oaxaca and Chiapas, validating
the fact that CC is an inequality indicator since its mortality
tends to concentrate in the least economically favored
regions throughout our country.
The primary cause of CC is chronic infection with a high-
risk type (16 and 18) of human papillomavirus (HPV), the
most common infection acquired during sexual relations. In
most women, these infections resolve spontaneously, but a
minority persist and may progress to CC 10 to 20 years later.
This gap offers an opportunity to detect and treat precursor
lesions. The Pap smear is a well-established method for
examining the cells collected from the cervix to determine
whether they show signs of these lesions. It is a free and
essential screening test that must be done annually. It can
be done every two or three years if the patient has three
consecutive normal tests.
The evolution of CC has been widely studied and its precursor
lesions identified. In 1988 the Bethesda system (TBS) for
reporting cervical cytologic diagnosis was first introduced
and revised in 1991, 2001 and 2014. Its aim is to develop a
uniform terminology for cervical cytology interpretation
and upright communication between pathologists and
clinicians. TBS reports have three basic components:
a descriptive interpretation, a statement of specimen
adequacy and, optionally, a general categorization of the
interpretation. TBS defines the squamous intraepithelial
lesions, as well as all the HPV associated noninvasive
squamous cell abnormalities, and divides them between
low-grade squamous intraepithelial lesions (LSIL) and high-
grade squamous intraepithelial lesions (HSIL). Specimens
with subtle changes can be classified as atypical squamous
cells of undetermined significance (ASC-US). This division
has a better inter-observer reproducibility than other
reporting systems.
The features of LSIL include nuclear enlargement with
hyperchromasia or pyknosis and irregular nuclear contours
along with a perinuclear cavity and peripheral thickening
of the cytoplasm. Features that favor HSIL include
increased numbers of abnormal cells, higher nucleus to
cytoplasmic ratios, greater irregularities in the outline of
the nuclear envelope and nuclear chromatin distribution.
The appearance of the cytoplasm can help to distinguish
LSIL from HSIL in borderline cases. LSIL involve mature,
intermediate or superficial cytoplasm with polygonal
borders, while cells of HSIL have an immature cytoplasm,
either delicate or dense with rounded cell borders.
Based on the natural history of HPV infections, the majority
of LSIL regresses within an average of two years. However,
when LSIL or HSIL is detected by a Pap smear, a colposcopy
is recommended within six weeks; if HSIL is detected, a
biopsy should be performed and the patient must be
treated with cryotherapy or loop electrosurgical excision
procedure (LEEP). If HSIL is not detected, the cytology
must be repeated at six to 12 months. The treatment of CC
includes surgery, chemotherapy and radiotherapy.
A national program of CC screening has been in operation
since the 1970s, and ENSANUT reports 45.5 percent of
Mexican women of reproductive age had a Pap smear
in 2012, with increasing numbers and a plan to reach at
least 70 percent by 2018. Although screening with cervical
cytology has diminished CC in our country we still have
the highest mortality rates among OECD members. The
Ministry of Health has almost 2,000 employees working in
the national screening program, including colposcopists,
pathologists and cytotechnologists, but they are not
equally distributed or skilled, which hinders some women’s
access to efficient screening. Our health system must
focus on risk factors and low participation in screening
programs that dismiss many women from timely detection
of precursor lesions. Only a multidisciplinary program
established by determined policymakers, managers and
professionals in the health sector will meet the extent and
quality indicators needed for a real solution for the current
numbers of CC in Mexico.
Janet PinedaResident in Pathological Anatomy
at ABC Medical Center
Carlos Ortiz Chief of Surgical Pathology at ABC Medical Center
EXPERT OPINION
277
MATERNAL AND INFANT HEALTH
When presented with the problem of Mexico’s greatest
health concerns, many think not only of chronic disease such
as diabetes and cancer but also of teenage pregnancies.
“Another great issue is pregnancy in girls and teenagers.
Children of 10-14 years old are having babies. There were
400,000 births in 2015 and almost one in every five births
is to a teenage mother. The government has implemented a
national strategy aimed at preventing teenage pregnancies,
which are often unwanted and unplanned.,” says José Narro,
Mexico’s Minister of Health. Additionally, early childhood
disease has been one of the top 10 causes of death in
Mexico every decade since the 1950s. Globally, maternal
mortality has plagued women for millennia and although
most deaths are now preventable, they still occur, mostly
in developing countries.
MATERNAL MORTALITY
According to the WHO, 99 percent of all maternal deaths occur
in developing countries. Although Mexico has many policies in
place to prevent maternal and infant deaths, many pregnant
women, especially in rural areas, are unaware of official
recommendations and policies. Many maternal and infant
deaths can be prevented with the correct care. Unfortunately,
not all women receive this care due to factors such as
poverty, distance, lack of information, inadequate services
and cultural practices. In Mexico, UNICEF has implemented
RapidPro, a tool available through the government’s Prospera
Digital program, to bring information rapidly
and effectively to underprivileged women
through digital means.
TEENAGE PREGNANCY
According to the WHO, pregnancy and childbirth are the
second-greatest cause of death in 15-19-year olds globally.
Babies born to teenage mothers face a 50 percent higher risk
of dying in the first few weeks or being stillborn than those
born to mothers aged 20-29. Teenage pregnancy also has
a lasting impact on education levels as over 90 percent of
teenage mothers do not attend classes. The WHO reports that
although adolescent births count for 11 percent of all births,
they account for 23 percent of disease due to pregnancy and
childbirth. In January 2015, President Peña Nieto launched the
National Strategy for the Prevention of Teenage Pregnancy
(ENAPEA), whose objectives are to reduce the rate of
pregnancy in 15-19-year olds by 50 percent and eradicate
pregnancy in under-14s by 2030.
INFANT MORTALITY AND HEALTH
Approximately 2.7 million newborn babies died in 2015
globally and an additional 2.6 million are stillborn, according
to the WHO. According to OECD figures, infant mortality
rates in Mexico in 2014 were 12.5 deaths per 1,000 live births,
down from 17.6 in 2004. Infant mortality is defined as the
death of a child under the age of one. A WHO report pegs
the annual number of neonatal deaths in Mexico at 14,594
for the year 2013, the main causes of which are prematurity
and congenital abnormalities. Chronic diseases are
responsible for over half of infant or post-neonatal deaths
(aged one month to 59 months).
ANALYSIS
Indicators often used to measure the development of a country
are maternal and infant mortality. Although Mexico has made
great progress in these areas, work remains to be done. Also
linked to these indicators is the issue of teenage pregnancy
1% Non communicable diseases
5% Pneumonia
6% Other conditions
13% Birth asphyxia& birth trauma
14% Sepsis and otherinfectious conditions
24% Congenital anomalies
37% Prematurity
2% Meningitis/encephalitis
5% Diarrheal diseases
12% Other conditions
13% Injuries
17% Pneumonia
52% Non communicablediseases
ESTIMATED DISTRIBUTION OF CAUSES OF NEONATALS AND UNDER-FIVE DEATHS, 2013 - POST NEONATAL DEATHS (AGED 1-59 MONTHS)
� 37% Prematurity
� 24% Congenital anomalies
� 14% Sepsis and other infectious conditions
� 13% Birth asphyxia & birth trauma
� 6% Other conditions
� 5% Pneumonia
� 1% Noncommunicable diseases
� 37% Noncommunicable diseases
� 17% Pneumonia
� 13% Injuries
� 12% Other conditions
� 5% Diarrheal diseases
� 2% Meningitis/encephalitis
ESTIMATED DISTRIBUTION OF CAUSES OF DEATH OF CHILDREN AGED 1-59 MONTHS
ESTIMATED DISTRIBUTION OF CAUSES OF NEONATAL DEATHS
Source: WHO (2013, latest data available)
278
consumption of antibiotics and animal meat is the greatest
source of antibiotics for humans. We would like to participate
in this development with COFEPRIS because we think it is an
excellent initiative.
Q: What impact will this regulation have on your operations
and on your products’ formulas?
A: At first, it would limit the sale of antibiotics but I think that in
the long term this is a good area to begin regulating. It would
be beneficial for us to participate, to transmit our experiences
and in turn we can listen to COFEPRIS’ concerns. There is
nothing better for a country than for the population and the
authorities to work together to avoid the implementation
of a unilateral vision. I do not think we are going to change
the formulas of our products but the way in which they are
prescribed. The formulas are correct but we would have to be
much more careful of the way in which we administer these
products to animals.
Q: What are your short-term plans for your veterinary
operations?
A: We would like to create an alliance with another player. We
are already exporting a little to Central and South America
and Africa. There are good opportunities in Central and
South America because there are few manufacturing plants.
Antibiotic-infused premixes for the prevention of infection
in chickens and cows are our main product for this market.
In Africa, some governments have processes to facilitate
the entry of simple products, which helped us accelerate
exportation to those countries.
We continue to develop products for smaller species and
aquaculture and we are looking for a strategic alliance in
another country to accelerate our development. In addition,
we could export to other parts of the world where there
is little competition and it would be faster to do that in
cooperation with another party. We would like to enter
Europe a little faster. In Mexico, we would like to complement
our portfolio with products from abroad by importing
vaccines for cattle. The market is practically virgin and with
our industry knowledge and the prestige of our brand, it
presents an unmissable opportunity.
Q: What veterinary products top your portfolio here and
where are the coming opportunities?
A: The most important products are premixes and injectables.
Premixed food contains antibiotics and is our number one
market. Injectables for mastitis and other livestock infections
are our second most important group of products in the
veterinary division. We are venturing into the production of
products for small species such as cats and dogs.
In the near future, we would like to enter the aquaculture
market. There are many shrimp and trout farms in Mexico,
so we are already developing a premix for shrimp that can
be tipped into the water at shrimp farms, for example,
and will not disintegrate. This protects the shrimp from
infections. The aquaculture market in Mexico is growing
greatly, especially in northern states such as Sinaloa and
Chihuahua, where trout and shrimp farms have become
endemic over the past three years. We see a business
opportunity there for our veterinary sector.
Q: How does COFEPRIS interact with animal health
regulators?
A: SAGARPA is the top regulatory agency but COFEPRIS
will soon be involved with veterinary health because humans
consume animals. COFEPRIS tightly controls the human
AQUACULTURE THE NEXT FRONTIERFELIPE ESPINOSACEO of Laboratorios Collins
VIEW FROM THE TOP
Laboratorios Collins is a Mexican pharmaceutical group
with 47 years in the market focused on the manufacturing of
high quality medicine at affordable prices. Its main areas of
operation are generics and veterinary care
ProMéxico 2014 says Mexico is the 4th global exporter of
fresh Bluefin tuna, 2nd in frozen Bluefin tuna
279
Q: After 70 years in the eye-care sector, what are Alcon’s
main opportunities?
A: We are leaders in the surgical and contact lenses
market in Mexico and we believe our biggest opportunity
is in market expansion. There are approximately 2.3 million
Mexicans who need cataract surgery but only around
200,000 surgeries are performed annually in the country.
Our mission is to expand this market, especially because
around 17 percent of those who need this surgery are
already blind and their condition is totally reversible with
a 20-minute procedure. In Mexico, less than 1 percent of
the population uses contact lenses compared to around 14
percent of people requiring visual correction in the US, so
there is great opportunity here.
Q: How does Mexico compare to other countries in terms
of surgeries performed?
A: The number of surgeries performed is the lowest per
100,000 citizens among OECD countries. Many people
do not realize this is a curable disease, instead believing it
is a normal consequence of age. The number of patients
increases in Mexico because diabetes sufferers are more
prone to having cataract and retina problems. Plus,
considering the generational changes in the country and
the growth of the elderly population, there will be more
people needing this surgery and higher quality lenses.
Previously, it was possible to give 68-year-old patients two-
year lenses in countries a with life expectancy of 70, but if
life expectancy reaches 90 years, we would have to provide
lenses that will last much longer.
Q: What innovations are you following to facilitate the
treatment of visual diseases?
A: Innovation in intraocular surgery is advanced and we
have made progress in the lenses portfolio. We launched
a trifocal lens that enables patients to see from a long,
medium and short distance. Before, we had monofocal
and bifocal lenses but now people are asking for more,
especially as trifocal lenses assist the eye when in front
of a screen. Soon this trifocal lens will have toricity for
people with astigmatism. We are also changing surgical
technology. Normally, the machine makes an incision of less
AN EYE ON EXPANSION IN VISION CARE
IGNACIO CASTAÑÓNDirector General of Alcon Labs
than 3mm, destroys the crystalline and sucks it up. Then,
the doctor inserts a lens in the incision that sets inside the
eye. We are launching a 3D visualization system for retina
surgery, for which the doctor will have 3D glasses. Using
a 55-inch screen, he will be able to see the eye in three
dimensions. Another product we are launching is called
intraoperative aberrometer, a tool that helps calculate the
lens a patient needs.
Q: What are the most recent developments for contact
lenses?
A: We keep innovating to increase the comfort of contact
lenses. We have two types of daily lenses: one that is
lubricated when blinking, making the lens very comfortable,
and a water gradient lens, which has an extremely high
water composition.
Q: What is the business model you use to offer great quality
and technology to the public and the private sector?
A: Our portfolio is divided between what we offer to the
public and private sector. It is not realistic to offer the
same to both because the prices for a cataract surgery
vary according to the technology used. They can range
from MX$25,000 (US$1,389) to MX$100,000 (US$5,555)
depending on the patient’s budget and vision. For the public
sector, we try to offer high-capacity products that can cover
a lot of volume. Plus, we offer the public sector better prices
when purchasing in bulk. Around 70 percent of sales go to
the private sector and 30 percent to public institutions.
VIEW FROM THE TOP
Alcon Labs is the ophthalmology division of Novartis. It was
founded 70 years ago in Texas. The company is the global
leader in contact lenses and eye surgery and manufactures
surgical instruments and pharmaceuticals for vision care
The number of surgeries performed is the lowest per 100,000 citizens among OECD countries
280
BEWARE OF MOSQUITOES
Mosquito-borne diseases have been the subject of panic
in recent years. Here are the symptoms and effects of
the five most well-known vector-borne viruses in Latin
America, their effects and prevention recommendations
from global health organizations, notably the WHO and
the PAHO, followed by a map of areas at risk due to aedes
and haemagogus mosquitoes in Mexico.
CHIKUNGUNYA
Chikungunya is a viral disease transmitted by infected
mosquitos, most commonly the aedes aegypti and the
aedes albopictus. It can be fatal in rare cases. The most
common symptoms are a high fever, joint pain and
swelling, a rash, headache, nausea and fatigue, although
it can sometimes be misdiagnosed
as dengue fever because of the
similarity of the symptoms of
each. Symptoms usually appear
four to eight days after being
bitten and usually last two to
three days. The virus can remain in
a human’s system for up to a week
and it is possible for uninfected
mosquitos to catch the disease
by biting the infected and thus continuing the spread of
the disease. There is no vaccine but recovery provides
immunity. Autonomous transmission was detected for
the first time in the Americas in 2013. In 2015 PAHO
confirmed 37,480 cases and suspected 693,489 cases
in the Americas.
DENGUE FEVER
Dengue fever is a tropical disease spread by the aedes
aegypti and the aedes albopictus, mostly found in Latin
America and Asia. According to the WHO, the global
incidence of dengue has grown dramatically over past
decades and half the world’s population is now at risk of
the mosquito-borne disease in tropical and sub-tropical
climates. It estimates 500,000 people per year are
affected with severe dengue and require hospitalization,
many of whom are children. The WHO also indicates that
although numbers are under-reported, it is estimated
284 millon to 528 million people are affected, whether
they present symptoms or not. Symptoms include a high
fever, severe headache, pain behind the eyes, muscle and
joint pain, nausea, vomiting and a rash. Early detection
and effective healthcare have lowered fatality
rates from around 20 percent of infected to
under 1 percent.
In September 2016, the first dengue vaccine,
created by Sanofi Pasteur, was made available in Mexico. It
was the first country in the world to receive the preventive
treatment, after receiving COFEPRIS approval in late 2015.
It is a tetravalent vaccine, efficient against all four dengue
virus serotypes. The vaccine underwent 25 clinical studies in
15 countries involving 40,000 people. Before issuing approval,
COFEPRIS researched the vaccine for two years in conjunction
with international experts. It is available to those 9 to 45 year
olds. In the 9-16 age group, it has shown to have prevented 90
percent of cases of severe dengue, also known as hemorrhagic
fever, and prevented 80 percent of hospitalizations due to the
disease. The vaccine is given in three doses on a 0/6/12-month
schedule.
MAYARO FEVER
Mayaro fever is a virus usually
transmitted by the haemagogus
mosquito but the aedes aegypti
in South America has been found
to mutate and now also carries the
disease. It produces symptoms
such as a fever, headache, muscle
and articulation pain, nausea, pain
behind the eyes, stomach pain
and a rash. Symptoms take one to three days to manifest,
during which time the infected may be bitten by more
mosquitos, thus spreading the disease further. The last
outbreak was reported in Venezuela in 2010, with 77 cases
and 0 deaths, according to the PAHO.
Originally a South American disease, it is mostly present
in forested areas such as those in Brazil, Venezuela, Peru,
Bolivia and Colombia. In addition, the virus was detected
in Haiti in September 2016. With globalization and the
aedes aegypti mosquito present in a greater geographical
area, it is feared the virus will continue to spread and reach
Mexico, beginning in Yucatan, in the South. There is no
vaccine against mayaro fever.
YELLOW FEVER
Yellow fever, or hemorrhagic fever with hepatitis, is an
acute viral disease transmitted by mosquitos belonging
to the aedes and haemagogus species. It has the name
yellow because some patients develop jaundice as a result.
Although many do not experience adverse effects, more
common symptoms include fever, muscle pain, backache,
ANALYSIS
Vector-borne diseases have made headlines across the world
over the past year, particularly in developing countries. Five
are a potential threat to Mexico: chikungunya, dengue fever,
mayaro fever, yellow fever and zika
500,000number of people per
year affected with severe dengue and who require hospitalization, many of
whom are children
281
headache, loss of appetite, nausea and vomiting. For
most sufferers, symptoms last three to four days but for
a small proportion of people, the disease worsens and
around half of these people die within seven to 10 days,
according to the WHO.
The main areas of risk for yellow fever transmission are
South America and West Africa as the virus is present in
monkeys in those regions. Although the disease is not a
current health risk for Mexico, as with mayaro fever it is
worth being aware that the vector is present and thriving
in the country. A pre-emptive vaccine is available and is
recommended by health institutions around the world
for those travelling to areas of known yellow fever. A
single dose of the vaccine, produced by several global
manufacturers, provides immunity within 30 days for at
least 10 years and potentially for life. To prevent the risk
of an endemic, the WHO recommends vaccination of at
least 80 percent of a population, mosquito control and
endemic preparedness and control.
ZIKA
The zika virus is transmitted mostly by mosquitoes of
the aedes family. Symptoms include mild skin fever, a
rash, conjunctivitis, muscle and joint pain, malaise and
headache and lasts two to seven days. Based on a review
of evidence, the WHO have concluded that zika during
pregnancy is a cause of microcephaly and Guillan-Barré
syndrome, as vertical transmission occurs from mother to
child. Sexual transmission is also confirmed and strands
of the virus have been found to remain in the system
for months, thus causing a prolonged need for caution.
Active transmission of zika has now been reported in
most of the Americas, from the Southern US to Argentina.
Due to the number of microcephaly cases reported and
the number of other neurological diseases caused by
zika, the WHO declared a public health emergency on
Feb. 1, 2016.
There is no vaccine for zika. National and international
health agencies recommend protection against mosquito
bites and practicing safe sex to avoid contracting the
disease. Delaying pregnancy has been recommended to
hopeful parents and genetically modified mosquitos have
been released into the wild to mate and pass on a fatal
gene to offspring, thus killing potential future disease
carriers. Both have come under criticism. Meanwhile, the
disease continues to spread.
Few recorded sightings of the haemagogus
Increased number of haemagogus sightings
Areas with an altitude of less than 2,000m, presence of the aedes mosquito
Areas with an altitude of more than 2,000m, little presence of the aedes mosquito
Source: CDC and EOL
AEDES AND HAEMAGOGUS MOSQUITOES IN MEXICO
283
INSURANCE
12Much of the Mexican population is employed informally and does not have access
to public health services because they do not contribute to it. Instead, they are
covered through public insurance provider Seguro Popular.
Private health insurance in Mexico is limited in what it covers and remains
unaffordable for many. This is an opportunity that smaller private companies
have recognized. They are implementing innovative models to serve those in
the gap: rich enough to have access to public health services but too poor
to afford a private health policy. Others have observed disease trends and
spotted a chance to provide insurance for cancer, for example, which would
pay out should the insured ever be diagnosed with the specified cancer,
usually breast or prostate.
This chapter will highlight the efforts insurance companies and pension funds
are making to provide better healthcare quality and retirement opportunities.
It will also look into the prospects for financing from the vast pool of resources
Mexican retirement funds hold and look into how the insurance business is facing
the population’s main health concerns, their growth potential and plans of action.
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www.mexicobusinesspublishing.com
285
CHAPTER 12: INSURANCE
286 ANALYSIS: Innovation Needed to Bridge Insurance Gap
288 VIEW FROM THE TOP: Manuel Escobedo, AMIS
289 VIEW FROM THE TOP: Bruno Guarneros, Seguros Atlas
290 VIEW FROM THE TOP: Ricardo Casares, PartnerRe
292 VIEW FROM THE TOP: René Mieres, La Latino Seguros
293 VIEW FROM THE TOP: Paulino Decanini, SiSNova
294 VIEW FROM THE TOP: José María Ostos, McKinsey & Company
295 VIEW FROM THE TOP: Luk Vanderstede, Bupa Global
296 INFOGRAPHIC: The Main Causes of Death in Mexico
298 VIEW FROM THE TOP: Raúl Kuri, Seguros GNP
300 INFOGRAPHIC: Challenges Ahead for Health Insurance
302 VIEW FROM THE TOP: Javier Potes, Consorcio Mexicano de Hospitales
303 VIEW FROM THE TOP: Mario Carrillo, SCOR Global Life SE
304 VIEW FROM THE TOP: Cristina López, Murguía Consultores
305 VIEW FROM THE TOP: Omar Viveros, Willis Towers Watson
Eduardo Hori, Willis Towers Watson
286
INNOVATION NEEDED TO BRIDGE INSURANCE GAP
Providing universal access and coverage remains one of
the greatest challenges of healthcare in Mexico. The public
sector covers most formal employees through IMSS and the
Seguro Popular, an institution dependent on the Ministry
of Health, provides insurance for those working informally.
Those who can afford it buy private insurance, although
penetration rates are low in Mexico: 3.27 percent according
to the Encuesta Intercensal 2015.
“The market in Mexico is small because to have private
health insurance people must pay twice: once to social
security and then to their private insurance. Other
countries such as Chile and Colombia have reformed
their systems and integrated the private and public
sector. However, despite its small size, it remains an
attractive market as there are 8 million people privately
insured in Mexico,” says Ricardo Casares, Vice President
of PartnerRe Health Latin America.
Some states see higher rates of overall coverage than
others: San Luis Potosi, for example, an industrial hub with
many manufacturing workers paying public contributions,
has the highest rate of overall healthcare coverage in the
country with 89.53 percent of the population
affiliated to a certain service. Similarly, Nuevo
Leon and Campeche have rates of 87.88
and 87.84 percent, respectively, while the
lowest rates of overall coverage are seen in
Michoacan, with 74.03 percent, Mexico City with 78.49
percent and the State of Mexico, with 78.69 percent.
Conversely, Mexico City appears among the top three
states for penetration of private insurance along with
Nuevo Leon and Baja California. The country’s capital has
many informal workers with no access to healthcare but
also hosts a large number of corporate headquarters that
buy policies for their employees.
In states with oil rigs and workers, insurance coverage rates
from institutions such as PEMEX, SEDENA and SEMAR are
highest: Tabasco (5.22 percent), Campeche (3.96 percent)
and Veracruz (3.68 percent).
Employers are increasingly recognizing that sick workers
are not productive and that presenteeism is just as costly
as absenteeism, creating a financial burden. The Chamber
of Deputies reports that from January to September 2016,
absenteeism cost the Mexican economy MX$1.65 billion
(US$91 million). It estimates that presenteeism, though
difficult to measure, causes losses 4.5 times greater. Due
to the prevalence of chronic diseases in Mexico, it is thought
that by 2030 economic losses due to poor worker health
ANALYSIS
Increasing insurance rates in a country that does not have a
history of insurance culture is the challenge companies face.
The gap of those uninsured or with access to public services
but aspiring to private, presents an opportunity
00 11 22 33 44 55 66
Over 75
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-90-4
Source: Encuesta Intercensal 2015 � Women � Men
THE MEXICAN POPULATION (millions)
287
will reach 6.3 percent of GDP. For this reason, companies are
keen to take out insurance policies for their employees, also
providing opportunity to incorporate innovative models.
“The most important trend in insurance is prevention.
This concept is gaining momentum and companies are
implementing several strategies to participate in this
emerging area. There is a small percentage of the population
that is sick and there is another small percentage that is
healthy. In this demographic, there are sub-segments:
people who are disposed to developing diabetes, for
example, or those who engage in some kind of physical
activity but not consistently. Although there is still a long
way to go, we have noticed that a significant percentage
of the population is aware of prevention. Companies are
offering insurance to attract and retain employees and by
implementing prevention and wellness, they are reducing
their costs. By reducing stress levels, fewer people will need
to use public health services due to illness. It is a win-win
situation," says Omar Viveros, Director of Health & Benefits
at Willis Towers Watson, a global insurance broker.
Although reinsurance is a market dependent on the
insurance market, it also relies on the particular risk
culture of that market. “Brazil has almost double Mexico’s
population, so by simple numbers, this doubles the need
for direct insurance. However, companies in Brazil prefer
to retain much of their risk and what reinsurance does
exist pertains to a system that was previously a monopoly.
Mexico has roughly half the population of Brazil but we
provide double the reinsurance volume, which makes
Mexico the most important market for reinsurance in Latin
America,” says Mario Carrillo, Regional Director of Mexico,
Central America and the Caribbean for global reinsurer,
SCOR Global Life SE.
In this context, small insurance companies are making
their way to market, looking to provide coverage for those
completely uncovered or unhappy with public-sector
insurance. “Our idea was to become the largest hospital
network in Mexico even though our bed average is only
around 34 per hospital. Instead of being the largest hospital
network we want to become the first private healthcare
system in Mexico. We wanted to save patients money
and avoid out-of-pocket expenditure,” says Javier Potes,
President of the Conscorcio Mexicano de Hospitales.
However, there is still a bridge to gap as over 17 percent
of the population, or some 20.3 million Mexicans, remains
without any type of medical coverage, according to the
Encuesta Intercensal 2015.
“In Mexico there is a weak culture of insurance, investing
and risk management, which means people need to
be educated. In addition, insurance companies need to
ensure they have a product offering for the middle and
low socioeconomic segments. Some insurance companies
are strategizing to enter this market, perhaps by creating
products that offer new types of coverage or by working
with special providers. They need to segment this market
in a way that is attractive but affordable,” says José María
Ostos, Associate Partner at McKinsey & Company.
However, despite the challenges the sector presents,
many remain optimistic about its future. including Manuel
Escobedo, the President of the Mexican Association of
Insurance Institutions. Mexico faces major challenges
in its health system, especially chronic-degenerative
diseases. However, it is possible to turn these challenges
into opportunities thanks to the work of society and the
public and private sectors. We firmly believe that Mexico
has important elements: the country is the world’s 15th-
largest economy and ranks 11th in terms of population size.
It is about evaluating and realizing an appropriate strategic
management,” he says. “We want to show the benefits that
our sector can offer to expand the health coverage and the
quality of the services that are offered.”
HEALTH SERVICES IN MEXICO
UNKNOWN
NOT AFFILIATED
AFFILIATED TO A HEALTH SERVICE
119,530,753TOTAL POPULATION
� 82.18% Affiliated with a health service
� 17.25% Not affiliated
� 0.57% Unknown
AFFILIATION WITH HEALTH SERVICES IN MEXICO
Source: Encuesta Intercensal 2015 Source: CONDUSEF
RANKING OF MAJOR MEDICAL EXPENSES INSURANCE POLICIES 1Q17
1 Seguros Banorte 7 Metlife
2 Seguros Atlas 8 Bupa
3New York Life Seguros Monterrey
9 AXA
4 Allianz 10 GNP Seguros
5 Seguros Bx+ 11 Mapfre
6 Inbursa Seguros 12Aseguradora Interacciones
288
proposing collaboration scenarios between the public and
private sectors is to achieve short-term protection for the
19.3 million Mexicans who do not have this right.
Q: How does AMIS promote access to healthcare in a
country where access to health is a challenge?
A: With our proposal we want to show the benefits that
our sector can offer to expand the health coverage and
the quality of the services that are offered. The actions to
effectively meet our objectives are based on three axes:
population coverage, extent of coverage and services or
risks covered.
Q: To what extent are insurance policies based on
preventive actions a possibility in Mexico?
A: There is a gap in digital transformation both in Mexico
and internationally; for this reason, the 27th edition of
the AMIS Insurance Convention had as its main theme,
The Client of the Future in Insurance. At the same time,
each company works on the development and adoption
of new technologies that bring insurance to more people.
The new products must be aligned with the needs of
the client, which will be the focus of the activity of
the insurers. With the adoption of technology in the
implementation of policies and in customer service,
what we seek is to have the innovation that the industry
needs to offer financial protection through insurance to
the entire population of the country.
Q: What growth do you expect for the private insurance
sector in Mexico and what will be the contributing
factors?
A: We are a business sector that bets on Mexico and believes
in its people. In 2016, we invested MX$33.4 billion (US$1.9
billion) and generated employment for more than 76,000
people. Last year, the insurance sector grew 9.9 percent in
real terms and we reached MX$435 billion (US$24.2 billion)
in premiums. Given current economic conditions, we expect
7 percent growth in the insurance market in real terms this
year. By 2020, we expect the value to reach 3.1 percent of
GDP. To achieve this goal, we have designed the Expansion
Plan, which includes 16 priority projects for the industry.
Q: How can AMIS and the insurance industry better
support Mexico’s health system?
A: The public health system in Mexico has achieved
significant results, despite the fact that in recent decades
it has faced increasingly complex diseases that afflict
the population. In this context, the insurance sector
considers it essential to implement structural reforms that
will allow us to impact the epidemiological panorama
of the country. At AMIS, we have designed a proposal
titled: Towards Universal Coverage of Financial Health
Protection, in which we analyze the challenges we
consider most urgent.
Q: What role do insurance companies play in the fight
against chronic diseases?
A: The insurance sector in Mexico considers chronic diseases
to be of vital importance because they impact the life
expectancy of Mexicans. Our proposed document includes
financial protection for management of chronic diseases.
We consider it relevant to contribute with a proposal that
helps the government to respond to these needs, since
in recent years the costs related to treating only diabetes
have risen to US$7.7 billion. We believe that prevention is
key because if information campaigns are implemented for
timely care, adequate treatment can be accessed.
Q: What are the main challenges of operating in the
current Mexican healthcare system?
A: Mexico faces major challenges in its health system,
especially chronic-degenerative diseases. However, it is
possible to turn these challenges into opportunities thanks
to the work of society and the public and private sectors.
We firmly believe that Mexico has important elements: the
country is the world’s 15th-largest economy and ranks 11th in
terms of population size. It is about evaluating and realizing
an appropriate strategic management. The objective of
SECURITY VERSUS VULNERABILITYMANUEL ESCOBEDOPresident of AMIS
VIEW FROM THE TOP
The Mexican Association of Insurance Institutions (AMIS)
founded in 1937, unites Mexico’s insurance companies, with
the aim of promote the development of the sector across all
industries, including health
289
Q: To what extent should indicators be a part of a hospital’s
certification?
A: They absolutely should be. Now, certification is mostly
about services offered to patients, ensuring that the labs and
facilities are adequate, but there is no follow-up on the results
of that service. Individually, hospitals know the number of
infections that occur at the facility and publishing that figure
would be the transparent thing to do. The cost of medicine is
also impacting us greatly because the maximum retail price
is established for sale in pharmacies but not for hospitals,
which can charge insurance companies a higher rate.
Q: What is the financial impact of fraud in medical insurance?
A: We see falsified information, identity theft either of the
policyholder or the doctor, fake prescriptions and receipts
from ghost companies, middlemen who take a large cut
and dead people that are still alive. Who pays for all of this?
Policyholder does through their premiums, because insurance
companies pass these costs to the customer. If fraudsters steal
MX$500,000 (US$27,777), they are released within 24 hours.
Only theft over MX$800,000 (US$44,444) is punished. We
need to work with the authorities to change this. It is thought
that 10 percent of the cost of insurance premiums is due to
fraud. In 2013, fraud cost the insurance industry MX$15 billion
(US$833 million) overall.
Q: What trends do you expect to see over the next five years?
A: Insurance for the elderly will be one of the most significant
trends. We are facing a change in the population pyramid.
Now, a couple ending their work life at 65 will need to pay
MX$100,000 (US$5,555) annually for their insurance. However,
how much is their pension? They will probably be spending
three months of their pension on the insurance. Clients want
to be able to go to any hospital, to get discounts everywhere,
to pay only the minimum deductible. If clients go to hospitals
we have agreements with, it is much cheaper.
Q: How have the major medical expenses sector performed
in Seguros Atlas’s portfolio of services?
A: It is one of the company’s most important branches but
in general it has not grown as much as expected. Only 7
percent of the Mexican population has insurance or about
9 million people. This has increased by only 1 million people
in the past five years due to a lack of insurance culture and
access opportunities. Unfortunately, insurance is an elite
product because it is expensive and certain segments of
the population do not have access.
Q: What trends have you seen over the past 30 years?
A: The strongest trend is innovation. The last AMIS
convention was focused on technology and on optimizing
processes without losing the essence of service, a vital
component of our business because we work with people.
We need to focus on using technology to offer services to
our customers.
Q: What type of technology are you implementing?
A: We are changing our internal systems, developing and
using apps. For this, an inter-hospital system is required,
along with a call center and a doctor to perform the
diagnosis. We must also ensure compliance with data
privacy laws. Our app for patients is informative and
keeps them in contact with us. Another technological tool
is hospital electronic records. We have developed this and
are on the verge of releasing a digital card, accessible by
phone and which contains a policyholder’s information. It
also displays a QR code that hospitals can scan to obtain
a patient’s medical history. It will be available in 31 medical
units nationally.
Q: Atlas has an alliance with the Consorcio Mexicano de
Hospitales. What are the benefits of such alliances?
A: We need the cooperation of hospitals to optimize costs.
Our alliance with Consorcio Mexicano de Hospitales will
improve quality through certification. A hospital may
have the best transplantologist, the best neurologist and
conduct many renal transplants but, how many infections
occur there? Certification ensures all doctors and nurses
are qualified and are specialists in their field.
LACK OF INSURANCE CULTURE, ACCESS STUNTS GROWTH
BRUNO GUARNEROSMedical Director of Seguros Atlas
VIEW FROM THE TOP
Seguros Atlas is a Mexican insurance company in operation
since 1941. It offers specialized services such as fire and
maritime, life, accident and illness. It aims to offer personalized
insurance services to the general population
290
in Mexico and the US. There is a service we offer called Pulse,
which helps our clients manage the largest catastrophic claims
they may face such as cancer, transplants and heart diseases,
in turn helping patients reach the best quality of care at the
lowest cost possible.
Q: What trends are you seeing in the health market?
A: One of the most worrying trends is the increase in cancer
cases and the number of claims that insurance companies are
seeing. Health costs have always been a worry for insurers
as medical inflation is much higher than general inflation.
Companies are trying to better understand what is happening
in these trends and take preventive action to control this as
much as possible, without impacting premiums.
Q: Of PartnerRe’s products in health, which is the most
popular?
A: In Latin America, Working Excess Loss is the most
popular product. Our client defines a limit they can absorb,
in dollars or local currency, per person per year, all costs
below that limit are the responsibility of the insurer. If
costs exceed this amount, we take responsibility for those
amounts in excess. This is the type of product most used to
reinsure medical plans. The limit is defined by the size and
solvency of each client. To a lesser extent, we have quota
shares, or CATs for catastrophes such as pandemic, or an
event that impacts a larger number of people.
Q: What growth have you seen in 2016 in Mexico?
A: Precisely in 2016, PartnerRe started its health
operations in Latin America. Our initial activities focused
on a market analysis, country by country, to define our
top priorities. We started well, reaching clients in Peru,
Argentina, Mexico and Brazil.
Q: What strategy did PartnerRe implement to establish
themselves here in Mexico?
A: Our strategy followed several phases: research and getting
to grips with the market, the opportunities and the healthcare
system in each country, understanding how the private and
public sectors interacted with each other to identify the
niches we could direct our service. Once done, we defined
Q: The private insurance market in Mexico is small. How much
need is there for reinsurance?
A: The market in Mexico is small because to have private health
insurance people must pay twice: once to social security and
then to their private insurance. Other countries such as Chile
and Colombia have reformed their systems and integrated the
private and public sector. Despite its small size, it remains an
attractive market as there are eight million people privately
insured in Mexico. The insurance companies active in the
market are serious and respected companies, so this is an
attractive segment to develop for PartnerRe.
Q: How does PartnerRe set itself apart from other reinsurers?
A: Reinsurers offer capacity so that insurance companies
can settle any deviations in their results. PartnerRe wants to
offer not only capacity but also to be a partner in business,
helping insurers develop their own insurance portfolio. We
help them improve their profitability, always a relevant factor
for health insurance, and amplify their presence in the Mexican
market, which results in benefits for us too. We achieve this by
being close to our clients and examining their issues carefully.
PartnerRe has a team of over 80 people specialized in health,
INSURING THE INSURERSRICARDO CASARESVice President of PartnerRe Health Latin America
VIEW FROM THE TOP
AFFILATION TO HEALTH SERVICES IN MEXICO
0
20
40
60
80
100
US
Turk
ey
Mex
ico
Ko
rea
Isra
el
Fin
land
Cze
ch R
epub
lic
Can
ada
Bel
giu
m
Aus
tral
ia
PUBLIC AND PRIVATE HEALTH COVERAGE (percent of population)
Source: OECD 2015 � Public � Private
291
priority countries to start our efforts, we established an
operating model, then internally determined our pricing and
underwriting models and how our operations would work in
issuing contracts and managing events. After that, we began
visiting companies, announcing that we started our health
reinsurance operation in the region, complementing the
other lines of business we already had available. Health was
practically the only line we were missing in the Latin American
market. We approached clients around the dates they
were due to renew contracts with their existing reinsurers,
requested information, and present to them our offer and
services. There are more countries in Central America in which
we would like to start operating. We aim to open Guatemala
and Panama this year, as we have seen important companies
requiring reinsurance services there.
Q: What were the greatest challenges you faced in entering
Mexico and how did you overcome them?
A: The greatest challenge is always being better than the
competition. Reinsurance prices are low and there is strong
price competition, therefore we do not only want to compete
on price but also with a differentiated service based on our
unique expertise, additional services and our expert team,
through our Pulse program. We will continue looking at the
Mexican insurance market. There are also possibilities for
offering reinsurance to other types of companies such as
self-insurers, which are large multinationals and government
programs that provide their employees insurance. We could
offer them a Stop-Loss type of coverage in case the plan goes
over the company’s budget. In 2017, we will be identifying this
market in Mexico and in Brazil.
Q: Your 2016 results show 6 percent growth on a constant
currency basis. What part of this is due to Mexico and Latin
America?
A: A great part of this is due to an important growth
that we have in our life portfolio in Latin America. Non-
life reinsurance is going through a difficult phase of price
lowering. This is a pressured sector, but on Life and Health
we expect to continue our growth trend. In addition to
starting our health operations in Latin America, we also
started in Middle East in 2016. Opening such niches has
pushed company growth. We have expanded so much due
to PartnerRe’s desire to be a preferred reinsurer for all our
clients, to be a reinsurer that listens to and understands
client needs. Before offering a quote we ensure the solution
will solve the client’s needs in the best possible way by
performing a complete analysis. We focus on offering
tailored solutions to clients. PartnerRe is recognized for
offering technical solutions with high levels of support that
enable us to quantify risks and give solutions.
Q: What will your priorities be for 2017 and how will you
achieve them?
A: We will focus on the largest and most profitable
markets in Latin America, getting close to target clients
and demonstrating our services. In March 2017, we held
an event in the US, taking several clients from Mexico and
Guatemala and showing them a world-class operation
from the largest private health insurer worldwide. We
are also working very closely with reinsurance brokers,
as they play an important role in several markets. We
are planning to grow organically, although we are always
open to the possibility of inorganic growth. Last year
we acquired a reinsurer in Canada for health. Other
acquisitions and strategic alliances have been made in
the past, for example with BestDoctors we are offering
a popular product in Asia.
PartnerRe provides multiline reinsurance to insurance
companies in three segments: nonlife, life and health and
corporate. The life and health segment provides coverage to
primary life insurers and employer-sponsored pension plans
292
a hospital does not have a maximum price cap. Another
problem is related to age; the older you get, the more
insurance costs go up. In this regard, life insurance could
play an important role. If you consistently invested in your
life insurance then you should be able to draw from that
insurance in old age to pay for medical expenses.
Q: How is technology changing and impacting La Latino
Seguros’ operations?
A: Technology is transforming our operations. We are
working on an app that will allow our clients to easily access
information and contact us. It will help clients control their
spending, as it will tell them which hospitals are included in
their policy. The app also allows for greater communication
with the company, without intermediaries, because we
recognize that call centers are managed by third parties and
obtaining some information can be difficult. We expect to
have the app ready and available by December 2017.
Q: What are La Latino Seguros’ priorities for the coming
years?
A: We have enjoyed significant growth in the past three
years, a period in which we almost tripled our operations.
In 2014, we started the year managing premiums worth
MX$430 million (US$23.8 million) and we are expecting to
finish 2017 with MX$1.3 billion (US$72 million) in premiums.
When it comes to the products we offer, we have not
closed our life products division, even though it requires
a significant capital injection. We manage traditional
and integral products in the life segment. The integral
products are investment products that can be made for a
determined number of years. We believe that we offer an
important differentiated product for the market. Although
we have been in the country for over 100 years, we are
working to create more awareness of our brand and to find
new ways to reach more clients. That is our focus. We are
not expanding into new business areas; our challenge is
to continue growing steadily in the segments we know so
well and to continue offering top-quality service so that
in five years we can go from being a small company to a
medium-size company.
Q: How is La Latino Seguros positioned in the health
insurance sector?
A: La Latino Seguros has been in the market for 111 years. It
started as an insurance company providing life products but
as the business evolved, we began playing in the medical
expenses segment. We have the most long-lived name
among insurance companies in Mexico. We have insured the
Mexican population in times of crisis such as the Revolution,
and the earthquakes of 1957 and 1985. La Latino Seguros
is among the top paying companies in terms of meeting
claims during disasters, particularly for the health sector. Our
participation in the Mexican health sector is limited to certain
segments but it is a very important part of our portfolio.
Q: Which indemnification products tend to be more popular
for the health sector?
A: We are focused on offering indemnificatory products
that complement our medical expenses coverage. We are
reviewing the more common diseases that take a toll on
the population and analyzing how the scheme could work.
The company is also analyzing the possibility of reaching
agreements with public national institutions such as the
National Institution for Cardiology or the Pediatric National
Institution. This would allow us to sell affordable medical
insurance with reasonable coverage conditions that might
provide access to A or A+ hospitals but that guarantee
access to other excellent hospitals.
Q: What is behind the increased premiums for medical
expenses?
A: In recent years, insurance companies have recognized that
COFEPRIS does not regulate the prices hospitals can charge
for medications. For instance, pharmacies are regulated by
COFEPRIS and are given a maximum price at which they
can sell a medicinal product, but that same medication in
COVERING MEXICAN REQUIREMENTSRENÉ MIERESCommercial Director of La Latino Seguros
VIEW FROM THE TOP
La Latino Seguros is a Mexican company with more than
100 years of experience in the insurance sector. It offers a
wide range of policies in medical expenses, life, automobile,
accidents, corporate and house insurance
293
Q: What is SiSNova’s growth strategy?
A: We have agreements with more than 300 hospitals and
5,000 affiliated doctors across Mexico. In mid-2015, we
did not have any clients but by the end of 2015 we had
over 7,000. In 2016, we insured over 40,000 people and
in the first quarter of 2017 we were near 50,000. The main
internal drivers of this growth are our focus on medical
care and our response to the insured patient. Once a user
becomes a patient, we answer as a provider of medical aid
not as an insurance company, recovering the essence of
why someone approaches an insurance company, especially
when they require specific medical care. We have a 99
percent policy renewal rate.
There are also external factors that boost this growth, the
most important of which is the big gap that is not covered
by the public or private health sectors. There are 121 million
people in Mexico, around six million of whom have private
insurance. But more than 30 million Mexicans belong to the
C segment, where some have coverage but want to access
a system with better services. Therefore, there still is a great
opportunity to open access to the Mexican population.
The public sector has limited capacity to offer punctual
and complete service and the private sector is becoming
increasingly expensive, leaving behind the larger part of the
Mexican population. We grow by looking for new users and
through references from our team and our clients.
Q: What are the company’s objectives for 2017 and the
coming five years?
A: We would like to keep growing at the rates we have seen
so far. However, we are conscious that uncontrolled growth
can affect the level of service in solving medical problems.
The challenge is huge because the need is infinite. Our
business is not to sell policies, it is to offer medical care
with quality and security through an insurance policy.
Q: SiSNova is a young company. What strategy has it
employed to compete against established companies and
new models?
A: Our differentiator is that we prioritize medical criteria
over financial or economic criteria. Our offer is based
on early prevention and the promotion of a change in
healthcare culture. This has a significant impact on costs
because if we change our habits, we can prevent chronic
diseases and their related complications and if we detect
diseases on time we can treat them before they become too
complex and expensive. Therefore, our focus is on integral
medical care, from prevention to treatment.
Changing healthcare culture is a long process, so first we
want to provide access to immediate medical care without
a direct cost for the user. We establish specific parameters
to be able to provide follow-up and organize our insured
population by demographic and epidemiological
characteristics. We promote this by giving users benefits
as they accomplish their goals, so they can have access to
better services without higher prices.
Q: It says on your website that a new era in medical
insurance began on May 2, 2015. How so?
A: This is because our greatest goal is to give the Mexican
population more access to a better healthcare service
with international standards and quality. Major expenses
coverage was designed to avoid an economic rupture
when there is a health problem within the family but the
deductible and co-payment must be covered first by the
patient. Insurance companies never cover prevention,
primary care or early diagnosis. Everything is designed for
treatment. Traditional insurance companies have tried to
administrate healthcare with the goal of containing costs,
but their policies are designed for major health expenses.
This makes the system inefficient and this is one of the
major factors why private insurance is so expensive in
Mexico, and one of the main reasons why out-of-pocket
expenditure is so high and increasing despite extensive
healthcare infrastructure. Also, since public services
sometimes receive a subsidy, the public believes it has the
right to healthcare, but this comes at a cost.
INNOVATIVE INSURANCE BRIDGES CARE GAP
PAULINO DECANINIExecutive Vice President of SiSNova
SiSNova is a Mexican company attempting to change the
insurance landscape, offering preventive services through
policies aimed at those not covered by the public or private
sectors
VIEW FROM THE TOP
294
The private label market is growing at over 20 percent in
value terms. This is disproportional growth compared to the
overall 4-5 percent growth rate of the total pharmaceutical
market. In the past, pharma companies would have simply
increased prices when faced with a tough global economic
situation, but now it is not possible because patients have
low-cost alternatives and pharma companies would lose
market share. Despite this, in 2016 prices increased because
raw material costs rose due to the peso devaluation. To
remain competitive, pharma companies are focusing on cost
containment measures. In the past, these companies never
looked at general and administrative expenses or back-office
costs, focusing only on their sales force expense, which is the
largest item on their profit and loss statement. Now, every
cost item is being examined. Some companies are starting to
look into digital promotional and patient support models to
enable this efficiency but they have not reached the level of
sophistication of other industries. Companies still believe that
traditional face-to-face promotion is the way to go.
Q: What are the most prominent issues you have spotted?
A: What is new these past years is peso devaluation, in
some way driven by the US political situation. Companies
have reacted with caution, especially when it comes to
new investments but I do not see any panic. Companies are
working as usual. The other change is the launch of more
biosimilars. Multinational companies are the ones mainly
affected by this trend. They are struggling because they
now face more competition across their innovative portfolio.
Some multinationals are launching patented products in
Mexico but they are also having trouble getting inclusion to
the formularies of the main institutions, which is becoming
increasingly difficult. The strategy of solely focusing on
innovative products might work in developed countries but
not in Mexico, so multinationals need to adapt their strategies
or change their portfolios. Across the broader healthcare
industry, I see a proliferation of start-ups and business models
trying to bridge the gap that the public and private insurers are
not filling. These new businesses are positioning themselves
in the center, serving the middle and low socioeconomic
segments that cannot pay for traditional private insurance
but do not want to receive public care.
Q: Why are medical insurance penetration rates so low in
Mexico? What is being done to increase this?
A: Brazil is the best comparison for Mexico, which has a 21
percent rate of private health insurance as a percentage
of total healthcare spend, the highest in Latin America. In
Mexico, there is a weak culture of insurance, investing and
risk management. This means people need to be educated.
In addition, insurance companies need to ensure they have
a product offering for the middle and low socioeconomic
segments. Some insurance companies are strategizing to
enter this market, perhaps by creating products that offer
new types of coverage or by working with special providers.
They need to segment this market in a way that is attractive
but affordable.
Q: To what extent are companies making drastic changes
this year considering current global economic challenges?
A: Given that the new economic environment is only one driver
shaping the Mexican pharma market, it is also important to
understand there are other drivers. A few years ago, we were
wondering why, if Mexico has a high prevalence of chronic
diseases, a growing middle class and an aging population,
overall healthcare and specifically pharma expenditure were
not exhibiting high growth rates. This is because public
investments in healthcare are not as high as they should be
and also there is low private health insurance penetration.
A good example is high-cost treatments because people
cannot pay for them out-of-pocket. Low-cost pharmaceutical
treatments are being bought out-of-pocket, which translates
into healthy growth rates for this segment. But this specific
growth cannot be seen in the market audits we track; this
growth is coming from the impulse and private label segments,
comprised of low-cost products sold in pharmacies directly
to customers. The impulse market is growing at more than
10 percent in value terms and on average up to half of an
independent pharmacy’s products will be impulse products.
NAVIGATING CHANGES IN PHARMAJOSÉ MARÍA OSTOSAssociate Partner at McKinsey & Company
VIEW FROM THE TOP
McKinsey & Company is a global management consulting firm
that serves leading businesses, governments, NGOs and not-for-
profits. It is the largest and longest-established management-
consulting firm in Mexico working in every major sector
295
purchase. Finally, we contribute to prevention awareness by
supporting events, like 5k and 10k races that we believe are
promoting a longer, healthier and happier life.
Q: Who are Bupa Global’s customers and what added value
do they receive?
A: The people that buy Bupa Global have a clear idea of
the importance of protecting their health. Those who come
to us are aware that we do cover certain risks that other
companies do not, such as extreme sports. In the case of
corporate clients, the companies that choose to work with
us recognize the benefits of Bupa Global coverage for
employees who frequently travel, or the companies just
want to provide an international premium medical insurance
as a retention strategy.
Q: What are Bupa Global’s main distribution channels?
A: We distribute through three different channels: agents,
direct sales and through partnerships with companies. In
Mexico, we are associated with American Express and with
Actinver. The main distribution channel in Mexico is agent
sales because people here prefer to deal face to face.
Q: What products can Bupa Global offer that other insurance
companies cannot?
A: We launched our Bupa Global Health plan in 2015 and it is
very straightforward. There are three variations of the product:
select, premier and elite. All have almost the same offering but
the difference is the insurance sum, which means that benefits
will increase as you move up. For all three products, the
insurance sum is renewable, so when customers renew their
policy they continue to pay the same amount. Unlike other
companies, we do not have a closed network of institutions
or doctors; we are an open network. However, we know which
hospitals our customers frequent and we have a department
to verify that the service conditions are appropriate.
Q: Bupa reported global revenue of £14 billion in 2015-2016.
What part did Latin America play in this?
A: This year, Bupa is celebrating 70 years and Bupa Global, its
insurance division, is one of the main players in this success.
Bupa Global has 22 million people insured globally and 86,000
employees and Bupa Global Latin America and Bupa Global
Mexico enjoyed strong growth from 2015 to 2016. The main
drivers of this growth are our presence and branding.
Q: What are the main challenges of operating under the
Mexican healthcare system’s regulations?
A: We regard regulations positively and we understand
that the goal is to have cohesion between what an
insurance company says and what it does. Regulations
verify that we provide only those services we can comply
with and that the rules of the game are clear. Fortunately,
the interaction between insurance companies and
regulatory agencies is positive.
Q: Premiums are paid in pesos but the insured amount and
deductibles are in dollars. How does currency volatility
impact Bupa’s bottom line?
A: Currency devaluation impacts companies like Bupa that
are active on the international stage. However, we have
implemented financial tools to mitigate that impact, which
includes hedging our assets. Our joint venture with Blue Cross
Blue Shield, the largest insurance company in the US, has been
one of our biggest sales drivers in the last few years and our
affiliates have coverage in 97 percent of facilities in the US.
Anybody who has a Bupa Global Mexico card also gets one for
Blue Cross Blue Shield, a benefit that has also helped improve
our customer-retention rate.
Q: What cost-effective solutions is Bupa Global providing its
clients to promote preventive care?
A: Two years ago, the AMIS finally authorized the inclusion of
preventive benefits in an insurance product. At Bupa Global,
when clients acquire an insurance policy they are entitled
to a free check-up with the annual renewal. We have digital
tools and a health app tailored specifically for Bupa customers
and we also have online distribution channels through which
potential customers can receive advice about their policy
INTERNATIONAL INSURANCE RETAINING MEXICAN TALENT
LUK VANDERSTEDEDirector General Mexico of Bupa Global Latin America
VIEW FROM THE TOP
Bupa Global is an insurance company belonging to Bupa, a
prominent association that cooperates in different business
areas but focuses on health in its international markets division.
Bupa Global has been in Mexico for more than 20 years
296
0 10 20 30 40 50 60 70 80 90 100 110 120 130
Other causes
Abnormal clinical and laboratory symptoms, signs and findings not classed elsewhere
Septicemia
Alcohol dependency syndrome
Anemia
Infectious intestinal diseases
Illness caused by HIV
Chronic and non-specified bronchitis, emphysema and asthma
Self-harm
Undernutrition and other nutritional deficiencies
Congenital malformations, deformities and chromosomal abnormalities
Perinatal a�ictions
Kidney failure
Influenza and pneumonia
Homicide
Chronic obstructive pulmonary disease
Cerebrovascular diseases
Malignant tumors
Diabetes mellitus
Ischemic heart conditions | Total heart conditions *
In motor vehicles | Total accidents
Alcoholic liver disease | Total liver conditions
68.47% 31.53%
43.12% 56.88%
33.21% 66.79%
THE MAIN CAUSES OF DEATH IN MEXICO
conditions accounted for almost half of all
deaths in Mexico in 2015.
Despite rapid treatment advances, there is no
magic cure for these diseases. Although certain
risk factors have been identified and scores
of scientists are working on finding solutions, perfectly
healthy people can be struck down by a heart attack and
children develop tumors. Cardiovascular disease englobes
tens of different conditions and a diabetes diagnosis entails
precautions such as a special diet for the remainder of one’s
life. Failure to do follow these precautions can not only
eventually lead to death but can cause debilitating side-
effects such as blindness and diabetic foot, resulting in
amputation and poor quality of life.
Cancer is often thought of as the scariest of them
all, as a tumor surgically removed or declared gone
after treatment such as chemotherapy can reappear,
sometimes years later.
Following the trend in other countries and notably in
developed ones, the main causes of death in Mexico
have evolved over the past century. Whereas infections
and communicable diseases were previously the
main killers, the rise of the pharmaceutical industry
and the implementation of better hygiene practices
have contributed to the decline of these killers. This
has enabled people to live longer which, alongside
unhealthy lifestyles, has facilitated the rise of chronic and
degenerative diseases. The longer people live, the more
likely they are to develop a degenerative CNS condition
such as Alzheimer’s or Parkinson’s disease, impacting
quality of life. Today, a Mexican is much more likely to
die from cardiovascular disease, diabetes or cancer
than influenza, diarrhea or smallpox. Those top three
INFOGRAPHIC
The main causes of death in Mexico have evolved over the
past 90 years, transitioning from infectious diseases to chronic
conditions. Over the past 30-40 years, cardiovascular conditions,
cancer and diabetes have become the top three foes of Mexicans
CAUSES OF DEATH IN MEXICO IN 2015 (thousands)
Source: INEGI
*Excluding Heart Attacks
655,688total deaths in Mexico in 2015
297
HEART CONDITIONS
Pneumonia/influenza
Whooping cough
Diarrhea/enteritis
Gastroenteritis and colitis
Infectious intestinal diseases
Malaria
Early childhood diseases
Smallpox
Measles
Accidents
Violent or accidental death and poisonings
Violent or accidental death
Cerebrovascular diseases
Heart disease
Malignant tumors
Diabetes mellitus
Hepatic cirrhosis and other liver diseases
Liver conditions
1922 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015
1
2
3
4
5
TOP 5 CAUSES OF DEATH IN MEXICO SINCE 1922
Stroke (blood cannot reach a part of the brain)
Abdominal aortic aneurysm (swelling of the aorta, the main artery)
Arrhythmia (abnormal heart rhythm)
Angina (pain in chest)
Atherosclerosis (build-up of fatty material inside the arteries) Atrial
fibriliation (irregular pulse)
Brugada syndrome (heart rhythm disturbance that restricts the flow of sodium ions to heart cells, causing disrupted electrical impulses through the heart)
Cardiac Arrest (heart stops pumping)
Cardiomyopathy (genetic condition, often thick or enlarged heart)
Cardiovascular disease (term for all diseases of the heart and circulation)
Congenital heart disease (heart condition or defect developed in the womb)
Cornonary heart disease (ischaemic heart disease, build-up of fatty material on coronary artery walls)
Catecholaminergic polymorphic ventricular tachycardia or CPVT (heart rhythm disturbance, caused by high levels of calcium in cells)
Familial Hypercholesterolaemia (genetically high levels of cholestoral in the blood, causing fatty build-up)
Heart attack (not enough oxygen-rich blood reaching the heart)
Heart failure (heart not pumping blood correctly)
Heart valve disease (diseased or damaged valve impacting blood flow)
Inherited heart conditions (most common are cardiomyopathies, arrhythmias, Familial Hypercholesterolaemia)
Long QT syndrome (heart rhythm disturbance delaying the flow of potassium ions out of heart muscle cells, sometimes allows too many sodium ions into the cells; causes a delay in electrical impulse)
Progressive cardiac conduction defect (PCCD) (slow electrical impulses, leading to heart block)
THE EFFECTS OF DIABETES
Other
Eye problems
Blindness
Amputations
Diabetic ketoacidosis
(T1D)
Hypersmolar state (T2D)
Hypertension
Dyslipidemia
Heart attackStroke
Death
side effects
Hypoglycemia
55% the number of diabetics that follow
treatment as indicated by
a doctor
Source: INEGI, Medigraphic
Source: British Heart Foundation Source: Diabetes.org
298
VIEW FROM THE TOP
PREVENTION A CORNERSTONE FOR OLDEST INSURER IN MEXICORAÚL KURIDirector of the Agent Channel of Seguros GNP
generate positive change and allow people to contribute
to the strengthening of a healthy and prosperous society.
Without a doubt, the healthcare sector plays an important
role in our society and is one of the main foci in the
development plan of any country.
In Mexico, we face a challenge in providing first-class
medical attention to all Mexicans to generate a positive,
long-term change. The hurdles are many. The first is to
generate a culture of prevention and opportune attention
to chronic degenerative diseases among all members of
society. The second is timely care and close monitoring
of the treatment of these patients. Finally, we must
strengthen research for new medical treatments.
The insurance sector plays an important role in
strengthening the healthcare industry because it grants
access to healthcare under any circumstances to a
greater number of people.
Q: What role does GNP Seguros play in the transition
toward a culture of prevention?
A: GNP Seguros is constantly on the lookout for services
that promote the prevention of chronic degenerative
diseases and their timely care, with the goal of improving
people’s health and their quality of life. Among the
programs we have developed to promote prevention is
GNP Looks After Your Health, which aims to diagnose and
reduce risks for the most common chronic degenerative
diseases in the country. This p rogram promotes three
essential habits, which are a balanced diet, regular
physical activity and stopping smoking. These three
habits, along with regular medical visits, are fundamental
to reducing health risks.
To date, 17 companies have entered the program with an
average participation of 70 percent of their employees
for a total of 16,500 participants. Out of a sample of
2,200 individuals, we measured a 32 percent reduction
in the risk of suffering a chronic degenerative disease.
This program is different from others because besides
prevention, it aligns with timely detection of the risk
Q: What are the main challenges you face when operating
in Mexico’s healthcare system?
A: The Mexican insurance sector is still developing and
searching for strategies to widen its reach among the
local population. Our strategy is to raise awareness
among individuals and companies about the importance
of insurance in the formation, care and optimization of
their legacy.
Today, approximately 80 percent of private healthcare
expenditure is paid out of pocket because only 7 percent
of the population has medical insurance. Of those who
have health insurance, 60 percent obtain it through a
company policy and the remaining 40 percent have an
individual policy. This situation reflects the importance
of increasing awareness about the need for health
insurance among Mexicans that will allow individuals to
generate a culture of healthcare prevention. Furthermore,
a larger number of insured allows insurance companies
to generate specific products according to the needs of
the population.
GNP issues one out of every three insurance policies for
medical expenses in Mexico. We have been the number one
company in this type of insurance for the past 70 years.
Promoting a culture of insurance is of the utmost
importance and this principle leads all our actions as
an insurance provider. We consider the use of insurance
a responsibility that benefits individuals, their families
and their surroundings. Through the program GNP
Looks After Your Health, we have provided education
and counseling regarding the acquisition of major health
expenses insurance.
Q: What role does healthcare play in GNP Seguros’
overall operations?
A: For GNP Seguros, healthcare is vital, both for
our internal and external activities. We have several
specialized programs designed to increase the impact of
prevention and timely treatment. These programs permit
individuals and companies to create a virtuous cycle to
299
Seguros GNP is one of the largest insurance companies in the
Mexican market. It has over 115 years of experience in cross-
sector insurance and is a part of the industrial group Grupo
Bal, which includes El Palacio de Hierro and Industrias Peñoles
factors of these diseases. Close monitoring of every
single one of our insured clients permits the program to
provide specific recommendations to contribute to the
improvement of people’s health.
Q: Some specialists see critical diseases as the insurance
sector’s Achille’s heel. What is GNP Seguros’ view on
this matter?
A: The relevance of chronic degenerative diseases has
motivated us at GNP Seguros to develop programs
focused on improving people’s health through timely
detection and care.
In the cases of insured clients who already have one
of these chronic diseases, GNP Seguros provides them
with top-flight treatment and follow-up to improve
their quality of life. The company also gives them many
tools to manage these conditions, including our Integral
Accompaniment Program that provides personalized
support for the insured. This program began for patients
of breast and colon cancer but has expanded to now also
encompass those with a chronic degenerative condition,
all types of cancer and neurological and cardiovascular
diseases.
Q: What strategy will Seguros GNP implement to
contribute to Mexican medical care over the next few
years?
A: Our role as an insurer is to continue developing
initiatives that make excellent healthcare services
available to all socioeconomic levels. The goal is to
enable all individuals to receive timely care in the face
of a sudden and serious medical emergency. Another
goal is to help them adhere to an appropriate follow-up
regime to improve their quality of life.
We also want to strengthen GNP Looks After Your
Health by adding more companies and individuals to
this virtuous cycle. The adoption of healthy habits
and periodic medical visits will promote risk reduction
of chronic degenerative diseases among the general
population.
Q: GNP has said that it expects cyberattacks, such as
the Wannacry virus, to increase the sale of insurance
policies. Is this happening?
A: The digital era we live in poses significant risks such
as cyberattacks, which rose by 50 percent in 2016. These
attacks increasingly target organizations and institutions
instead of individuals. We estimate that over 556 million
people are hit by these attacks worldwide every year,
causing economic loses over US$110 billion. In Mexico,
the damages caused by these crimes are estimated to
be over US$2 billion.
Without a doubt, the healthcare sector is among the
most vulnerable to these attacks due to the sensitive
information it handles. For that reason, it is important
to acknowledge that even after all security measures are
undertaken it might not be possible to prevent all attacks.
The sector has to implement broad-reaching security
measures and protection policies that allow all institutions
to safeguard their valuable information. Among these,
the acquisition of cybernetic damage insurance must be
considered to prevent and reimburse economic and brand
damage brought about by these crimes.
Q: What measures is GNP Seguros implementing to
protect organizations?
A: GNP Seguros is aware of the risks that cybernetic
crimes pose to companies in every sector. For that
reason, the company allied with Beazley, a global leader
in cybernetic attack protection, to develop CyberSafe
GNP, a comprehensive insurance to protect organizations.
Among the main benefits of this insurance product is
damage restitution, which can reduce economic losses for
the insured by up to 80 percent. This solution integrates
services such as a call center, expert reports, legal
representation, public relations and crisis management
to develop and implement an action plan to manage the
results of the attack.
GNP Seguros is a fully Mexican company with over 115
years of experience in the insurance sector, working across
segments. Our commitment to the country is not only
aimed at the financial field. We are also committed to
promoting responsible actions to raise social awareness
and to benefit Mexican health, which we believe is one of
the main pillars of a thriving society. For that reason, we
develop programs that help improve the health of Mexican
families and that promote prevention and timely detection,
all of which are cornerstones for improved health.
60 percent obtain health insurance though a company policy and 40 percent have an individual policy
300
INFOGRAPHIC
Higher medical expenses and a longer life expectancy have
created fresh challenges for the health insurance industry. To
attract customers, companies are adjusting coverage terms to
include limitations while also creating more flexible policies
This may not be enough as companies are also taking a hit on
previously profitable areas. According to AMIS, the accident
rate in 2016 was above profitability for companies. Also,
there are fewer workers in the public sector and
those employees remaining are losing benefits
such as medical insurance. Still, the public
sector represents a hefty opportunity as the
government remains a big purchaser. Between
October 2014 and March 2015, the federal government paid
leading insurer Seguros GNP MX$1.6 billion (US$88 million)
to cover major medical expenses for 320,000 public servants.
AUTO PARTS PRODUCTION PER YEAR IN MEXICO
0
10
20
30
40
50
60
70
80
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
MEDICAL AND HEALTH PREMIUMS (MX$ billions)
DISTRIBUTION OF THE REGIONAL SUSTAINABLE DEVELOPMENT FUND 2
Source: CGM, Ministry of Economy 1 With figures to March of 2015
11% Mazapil
9% Cananea
7% Nacozari de Garcia
5% Fresnillo
4% Ocampo
4% Caborca
2% Sierra Mojada
2% Sahuaripa
2% Morelos
2% Eduardo Neri
2% Aquila
2% Alamos
1% Chinipas
47% other
MEDICAL INSURANCE PREMIUMS (percent of the market)
7.5%of the population
was insured in Dec. 2014 (over 9 million
people)
CATASTROPHIC EXPENSES
� 37.4% Cancer
� 8.87% Bone system
� 7.78% Cardiovascular disease
� 7.69% Nervous system
� 5.3% Accidents
0
5
10
15
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
13.3% 13.6% 14.1% 13.4% 13.9% 13.7% 13.5% 13.7%14.8% 14.1% 14.6%
12.8% 13.2% 13.7% 13.1% 13.6% 13.4% 13.1% 13.2%14.2% 13.6% 14.1%
0.4% 0.4% 0.4% 0.4% 0.3% 0.3% 0.3% 0.5% 0.6% 0.5% 0.5%
LOW ACCEPTANCE
EXPENSIVE CASES (cost per patient)
Blood cell conditions in underage patients
MX$90 million
Body component equilibrium
MX$64.2 million
Glucosaminoglicanos metabolic disorders
MX$47 million
LONG CASES (cost per patient)
Diabetes patient (MX$1.4 million)
27 years
Cysticercosis patient (MX$2.6 million)
24 years
Chronic kidney failure (MX$2.1 million)
24 years
45% between 25-44 years old
71% part of collective or group plans
21% individual
—Major medical expenses —Health —Total
� Major medical expenses
� Health0.31%
GDP
CHALLENGES AHEAD FOR HEALTH INSURANCE
301
COORDINATION WITH PUBLIC HEALTH
PREMIUM SHARE (percentage of the insurance market)
LOSS RATIOS FOR MAJOR MEDICAL EXPENSES 2010-2016 (percent)
0
2
4
6
8
10
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
Sources: AMIS, El Asegurador
Most people are willing to pay for a known medic, if he or she is coordinated with public security network
� Individual � Group
HIGHER PRICES
In Mexico, the number of claims in group policies has always been higher than in individual policies
CONDUSEF and AMIS started a major medical expenses simulator that includes 10 companies, with the aim of increasing health insurance penetration in the Mexican market
SIMULATOR
of consumers with financal support are willing to go for a medical consultation with a private doctor, if references to the public network are possible
79.2%
60.3%has a doctor near workplace of house
64.8%are willing to pay for consultation near workplace of house
OF CONSUMERS WHO REPORT THERE IS A DOCTOR NEAR HIS OR HER WORKPLACE OR HOUSE AND WHO ARE WILLING TO PAY FOR CONSULTATIONS:
60
65
70
75
80
85
90
95
2010 2011 2012 2013 2014 2015
69%Individual
Percent of the population with major medical expenses coverage
2004 3.9%
2005 4.9%
2006 5.6%
2007 5.6%
2008 5.7%
2009 6.0%
2010 6.1%
2011 6.9%
2012 7.6%
2013 7.4%
2014 7.7%
2015 7.5%
Medical expenses policies increase in price every year
According to experts between 10% and 12%
According to Condusef, between 9% and 14%
78%Group
—Loss ratio 5 big firms —Loss ratio 5 big firms —Total loss ratio —Total loss ratio
79%total
medical expenses
74%group
medical expenses
93%individual medical
expenses
PRICE INCREASES OVER 10 YEARS
302
It does not cover cancer or a heart attack; in those cases,
patients should use their social security. This will be the only
insurance in Mexico for the middle segment in cost. Besides,
the system works with deductibles instead of refunds.
To arrange all these benefits we will launch a mobile
application that works with an algorithm that performs a
risk evaluation for each patient and provides personalized
information. It also will have a patient’s history uploaded so
even if a patient changes doctors, the doctor can still access
records. In the future, this platform will provide incentives for
prevention, such as gaining points to access gyms. The idea
is also to provide better prices to our patients and to allow
doctors to achieve more volume.
Q: What are the main advantages for hospitals, doctors and
patients as part of the consortium?
A: The initial advantage was achieving better purchase
prices because if all the small to medium-sized hospitals
buy together, they can get lower costs. The second idea
was to share information. The hospitals needed to see if
they were doing things right, so we developed manuals and
organized exchanges of professionals between the hospitals.
Then we started developing training opportunities for the
employees of each hospital. We developed online courses
for 13 different positions with different modules in each
and planned 30 annual talks on different topics. Now we
have four certification courses in hospital management,
marketing, purchasing and quality.
Q: What are your main objectives for 2017?
A: We want to reach 250,000 memberships for our system
in the next two years. It will be possible because at the
consortium there are 100,000 hospitalized patients every
year and 300,000 more who undergo ambulatory procedures.
The consortium will keep training and providing information
exchanges. We also want to integrate specialty clinics to
reach the goal of becoming the first private healthcare system
in Mexico. It is not an easy task because Mexicans do not
understand what a healthcare system is. But we are working
to create a model that includes all types of services, like social
security does, for a similar price and with better service.
Q: How has the consortium’s business model evolved with
the healthcare system?
A: The first goal of the consortium was to achieve operational
effectiveness, cost reduction, training and information
exchange. Our idea was to become the largest hospital
network in Mexico even though our bed average is only
around 34 per hospital. However, this vision has changed.
Instead of being the largest hospital network we want to
become the first private healthcare system in Mexico. We
wanted to save patients money and avoid out-of-pocket
expenditure. We did a study on health coverage in Mexico
and we found that 6 percent of the population has coverage
for major medical expenses, 60 percent have social security
and the rest cannot afford insurance. This last group is the
one that usually comes to us and spends a lot of money.
The reason for this situation is because insurance in Mexico
was created for hospitals, not for patients. The main
problem in Mexico is the lack of money. Insurance systems
can help us organize the market and become efficient in
managing hospital expenses so that premiums do not rise
as they usually increase 15 to 25 percent every year. Last
year, 20 percent of insurance holders canceled their policy.
Insurance is also limited and there are only options to cover
catastrophic diseases but not for the most common causes
of hospitalization. We want our model to bridge these gaps.
Q: What is the consortium’s plan to address this situation
as a group?
A: We approached insurance companies and proposed an
system we designed for patients at consortium hospitals.
It will be delivered to the segment of the population that
has no coverage through private insurance or social security.
It costs no more than MX$5,000 (US$277) a year and is
available with Seguros Atlas and Seguros Banorte. It includes
up to MX$170,000 (US$9,444) of medical expenses at our
hospitals and covers 90 to 95 percent of hospitalizations.
PRIVATE SECTOR STEPS UP TO THE PLATEJAVIER POTESPresident of the Consorcio Mexicano de Hospitales
VIEW FROM THE TOP
Consorcio Mexicano de Hospitales is a consortium of hospitals
that offer patients insurance coverage, working together to
save costs and aiming to create the first private healthcare
system in Mexico
303
Q: How important is Mexico within your global operations?
A: It is very important. As a reinsurance and insurance
market in general, it is one of the main ones. Brazil has
almost double Mexico’s population, so by simple numbers,
this doubles the need for direct insurance. However,
companies in Brazil prefer to retain much of their risk
and what reinsurance does exist pertains to a system that
was previously a monopoly. Mexico has roughly half the
population of Brazil, but we provide double the reinsurance
volume, which makes Mexico the most important market
for reinsurance in Latin America.
Q: How does the Mexican market compare to others in Latin
America?
A: Each country has its particularities and its own challenges.
The insurance markets in Latin America have developed
differently. In Mexico, private insurance penetration is low and
the objective of institutions has always been to increase this,
which means that more people are covered. In Colombia, for
example, insurance penetration is relatively good. There are
several types of coverage, such as pension fund insurance,
that do not exist in Mexico. Some countries allow citizens to
deduct their private insurance expenses from their federal
taxes, meaning they do not have to pay twice like in Mexico,
where people pay for public healthcare provided by IMSS
and then for a private policy on top of that.
Q: What are your goals for 2017? How will you achieve them?
A: We are seeing strong growth. Fortunately, each year has
been a record for us over the last 10 years or so. This is not
a coincidence, it is due to our development plan. In Mexico,
SCOR ranks third or fourth in its life and health business.
We have three main lines of development: the traditional
market, reinsurance to solve capital needs and designing
new products. We are currently researching other products
that could be viable and adapted to this market.
Q: What have been the biggest challenges in insurance and
reinsurance in 2016?
A: The main challenges have arisen from exchange rate
volatility. Medical inflation has increased and as a result
incidents have become more expensive to cover. In addition,
since policies are sold in US dollars, it is a challenge for
some people to renew them. Another factor is market
competition. It is a finite market with a defined number of
potential customers, which puts pressure on prices. Some
players are prepared to enter the market by narrowing
their margins, which also places more pressure on both
the insurer and reinsurer. Finally, medical insurance has
always functioned like a service. It is not a purely profitable
segment; life insurance, for example, has more stable, long-
term margins. Medical insurance is more volatile. Year-
on-year results vary and are influenced by many factors,
including hospitals, doctors’ fees, consumables, new
technologies, devices and medicines. Because of these
conditions, the number of players willing to participate in
the market is decreasing.
Q: What is the advantage of maintaining operations in this
challenging segment?
A: Most participants in the medical insurance segment
want more. Doctors want increased fees, hospitals want to
earn more for each case, agents want a higher commission
and insurers want increased profitability. As a reinsurer,
our operations are globally diversified and, therefore,
we can also help companies by introducing them to
best practices and solutions from other countries. For
example, to better manage medical expenses, insurers can
offer specialized policies that limit coverage to specific
conditions, such as fractures.
Q: Which is the most popular of the specialized products?
A: There is a certain product called catastrophic diseases
that was developed in the UK 20 years ago. There have
been catastrophic products covering 30 different diseases,
including some that were quite rare. These products have
been optimized and we have whittled them down to six
main ones, including cancer, heart attacks and organ
transplants. Of these six, cancer has the most impact.
ALTERNATIVE ROUTES TO GROWTH
MARIO CARRILLORegional Director of Mexico, Central America
and the Caribbean for SCOR Global Life SE
VIEW FROM THE TOP
SCOR is a French reinsurance group founded in 1970 with
a global presence in over 160 countries. It operates in life &
health and property & casualty and has had a direct presence
in Mexico for six years
304
those who are over 30 years old. For a company prevention
program to succeed, we must start with young people right
when they begin their working life and habits.
Exercising regularly, taking an entire hour for lunch and not
eating in front of the TV are some habits that companies
should promote to keep people healthy. There is a vicious
cycle that prompts health-related events: many people work
10 hours a day for minimum wage, and must commute for
up to four hours daily, lacking the time to exercise. Because
they earn minimum wage, they are likely to have unhealthy
eating habits. Obesity follows and eventually employees
suffer from diabetes, cardiovascular problems and related
diseases. We need to break this cycle.
Q: How do you help people over 35 years old to change
their habits?
A: A campaign that usually has good results is to remove
trash cans from the office, which compels workers to get
up and walk. Walking contests also have positive results.
Providing rewards like vacation days or cinema tickets is
important. When employees start noticing results, they stop
doing it for rewards and start doing it for their wellbeing.
Q: What are the advantages and challenges of micro
insurance?
A: Companies like American Express sell a series of
inexpensive micro insurance policies, such as life and travel.
However, when a person takes out a loan, the organization
providing it must include life insurance (payment protection
indemnization) so that the credit is paid if the creditor
passes away. Micro insurance should not be for sale, it must
be given to the people in the poorest social segment.
Q: What are Murguía’s biggest challenges?
A: The biggest challenge is becoming more efficient, being
up-to-date on global trends, achieving differentiation
and being in direct contact with patients instead of
over the phone or by email. For the rest of 2017, our
challenges are preventing mistakes, further training our
staff and preparing for next year’s potentially politically
troublesome situation.
Q: What advantages or benefits do clients receive from an
insurance broker like Murguía Consultores?
A: Being a specialized broker enables Murguía Consultores
to identify client needs. Identifying when to offer benefits to
employees is important, so we develop three to five-year plans
that allow clients to modify provided benefits according to
their changing needs. The ability to develop strategic plans
and to provide agile, tailor-made solutions and personalized
services are some of our strategic advantages. Murguía has a
team of 15 people that take care of health-related events by
providing our clients with direct 24/7 assistance.
Q: What role does prevention play in Murguía Consultores’
offering?
A: When a Murguía client contracts any of our three
programs, our supplier Uhma performs medical examinations
and applies a health risk-assessment questionnaire. This
provides an insight on people’s habits and lifestyles. Based
on that health assessment, Murguía develops a demographic
profile of the company that enables it to identify common
diseases and develop tailormade solutions to prevent or
minimize them. Our programs are focused on generating
changes in habits to achieve positive health results.
Q: What are the most common diseases companies see
among their employees?
A: There are two kinds of health-related events: the chronic
and the catastrophic. Many chronic events are related to
stress: gastritis, colitis and even paralysis are caused by stress.
Lack of physical activity can also aggravate stress-related
diseases. Even if these conditions are diagnosed, they are
usually not covered by insurance policies. The most common
catastrophic events are cancer, intestinal obstruction and
heart stroke, which sometimes are related to both stress
and obesity. Companies that do not promote exercise may
have employees who are vulnerable to disease, especially
WELLNESS MAKING INROADS IN INSURANCECRISTINA LÓPEZDirector of Employee Benefits of Murguía Consultores
Murguía Consultores is an insurance broker working across
sectors. In health insurance, it specializes in offering policies to
employees of its client companies that cover everything from
dental and vision to critical illness
VIEW FROM THE TOP
305
PREVENTION AN EMERGING
INSURANCE TREND
Q: What is the most significant trend in health insurance?
OV: Medical insurance is expensive due to a number
of reasons. It is overused but has not yet reached mass
consumption. In 2016, 9.1 million people bought medical
insurance, a small percentage of a country that has over 120
million people. To amplify insurance penetration in Mexico,
companies need to create specific coverage. Employers also
must have the ability to offer coverage and benefit schemes
that make sense to its employees. But it is also necessary for
the government to contribute with fiscal incentives.
The most important trend in insurance is prevention.
This concept is gaining momentum and companies are
implementing several strategies to participate in this
emerging area. There is a small percentage of the population
that is sick and there is another small percentage that is
healthy. In this demographic, there are sub-segments: people
who are disposed to developing diabetes, for example, or
those who engage in some kind of physical activity but not
consistently. Although there is still a long way to go, we have
noticed that a significant percentage of the population is
aware of prevention. Companies are offering insurance
to attract and retain employees and by implementing
prevention and wellness, they are reducing their costs. By
reducing stress levels, fewer people will need to use public
health services due to illness. It is a win-win situation.
Q: Would indemnification payments have a positive impact
on the mass consumption of medical insurance?
OV: Indemnification payments are already being used
and are certainly a mechanism that can help to spur mass
consumption of medical insurance. However, they are not
the solution. In 2013, the number of insured people went
from 8.8 million to 9.2 million people, an important leap
when comparing the growth of insurance in previous years.
Q: How is the insurance market preparing to take care of
an aging and obese Mexican population?
OV: As employers, we must continue with efforts to educate
the population on the dangers of obesity. There are a
number of initiatives companies can implement, such as
offering healthy snacks that can have a positive impact
in the medium term. We need to work on insuring more
people so that in a few years the public sector will not be
saturated by the demands of an elderly population. We
need to work on creating a prevention culture.
EH: The social security system in Mexico is saturated. Data
from the National Population Council (CONAPO) estimate
that close to one-fourth of the Mexican population will be
aged over 60 by 2050. If this segment of the population
with a larger tendency to get sick uses public health, it will
greatly increase pressure on the system. The other option is
that people who have enough resources use private medical
services, but individual insurance for people over 60 is
extremely expensive. That is why we suggest using private
pension funds to cover these future private medical expenses.
Q: How can the private and public sectors work together
to promote wellness and prevention?
OV: In late 2015, the Ministry of Labor and Social Welfare
(STPS) recognized that stress is a condition that impacts
health negatively. As a consequence of work-related stress,
indicators such as tobacco use and alcoholism have increased.
It would be ideal if the government could enforce measures to
promote prevention in companies. However, employers would
balk at this because of the related increase in operating costs.
In an ideal world, the private sector and the government
would act with greater synergy; if a governmental initiative
became mandatory, the private sector would be subject to
sanctions if it refused to comply, thereby giving companies
the incentive to act. However, the government must really act
upon it. Additionally, companies must understand that stress
among employees has a negative impact on their productivity.
Willis Towers Watson’s consultancy has the experience and
the abilities to help companies implement wellness strategies
and to negotiate with insurance companies or third parties
when needed.
EDUARDO HORI Senior Consultant in the Retirement
Practice at Willis Towers Watson
OMAR VIVEROS Director of Health & Benefits at Willis Towers Watson
VIEW FROM THE TOP
Willis Towers Watson is an advisory, broking and solutions
company that helps clients around the world turn risk into
a path for growth. With roots dating to 1828, Willis Towers
Watson has 40,000 employees serving more than 140 countries
307Traditionally, Mexican medical professionals are seen to be part of the general
brain drain to the US and to a lesser extent, Europe. Many insiders beg to differ.
They argue that although professionals may choose to train abroad, they often
return to their homeland with a variety of additional skills – a plus for the country.
A bigger issue for Mexico may be that it is training too many general doctors,
around 14,000 per year. It has the capacity to offer specializations to less than
a quarter of those, creating potential opportunities for foreign professionals.
Mexican universities are addressing the issue by further improving the training
they offer students and are imparting additional competences requested by
recruiters, such as business or communications skills. In the modern world,
learning is never complete and some institutions are going online to offer
additional courses to medical professionals.
This chapter will feature analyses on the Mexican job market, gender equality and
insightful interviews with the country’s top universities and recruiters, enabling
readers to explore the strategies employed to keep talent at home while also
attracting foreign talent.
ATTRACTING & RETAINING TALENT
13
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SEPTEMBER 6, 2018SHERATON MARIA ISABEL, MEXICO CITY
Join the discussion as leading insiders from Mexico’s health industry discuss trends, opportunities
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309
CHAPTER 13: ATTRACTING & RETAINING TALENT
310 VIEW FROM THE TOP: Enrique Cabrero, CONACYT
312 VIEW FROM THE TOP: José Mustre de León, CINVESTAV
314 EXPERT OPINION: Jorge Valdez, Tecnológico de Monterrey
Germán Fajardo, UNAM
316 ANALYSIS: Gender Pay Gap Prominent in Mexican Healthcare
317 INSIGHT: Marlene Llópiz, IMC
318 VIEW FROM THE TOP: Dominik Bacher, Bacher Zoppi
319 VIEW FROM THE TOP: Justyna Kroplewska, Hays
320 INSIGHT: Francisco Hernández, Grupo Accses
321 INSIGHT: Ignacio Pérez, Heidrick & Struggles
322 ANALYSIS: Jorge Valdez, Tecnológico de Monterrey
323 VIEW FROM THE TOP: Simone Sato, Laureate International Universities
324 EXPERT OPINION: Marlene Llópiz, IMC
327 VIEW FROM THE TOP: Gabriel Alvarado, Kronos
328 ROUNDTABLE: How Can the Private Sector Promote a Better-Educated Workforce?
310
A: Most of the brightest Mexican talent focuses on
researching chronic and infectious diseases, the leading
causes of death and disability. Research is primarily
focused on obesity, metabolic syndromes, nephrology,
rheumatology, heart diseases and respiratory diseases.
Mexico has renowned researchers who focus on the
study of infectious diseases, including vector-borne
diseases such as dengue and chikungunya, as well as
those resulting from a virus like zika.
Many of our scholars have been internationally recognized
for their work. For instance, in 2017 the British Council
granted the physicist Fátima López the Study UK Alumni
Entrepreneurial Award. She completed a Ph.D. in Medical
Physics at the University of Sheffield and she is currently
responsible for implementing a new national policy that
allows IMSS to commercialize new technologies, with
royalties bringing in hundreds of millions of pesos that
will be reinvested in the Mexican healthcare system.
The British Council also granted Pablo Manrique the
Study UK Alumni Social Impact Award. He completed his
Ph.D. at the Faculty of Infectious and Tropical Diseases of
the London School of Hygiene and Tropical Medicine. He
is a professor and researcher at the University of Yucatan
and focuses on control methods of the Aedes aegypti
mosquito, the main transmitter of dengue, chikungunya,
zika and yellow fever.
Last year, L’Oréal, CONACYT, UNESCO and The Mexican
Academy of Sciences granted Viridiana González a
scholarship for her work on aging and health problems
of the elderly. She works in the Department of Health
Sciences at the Metropolitan Autonomous University.
Q: What has been done to increase the number of
specialized workers, a need identified by CONACYT in
2015?
A: The number of scholarships provided by CONACYT
has increased by 34 percent since 2012 and there are
45 percent more members of the National System
of Researchers. The number of students enrolled in a
Q: How can Mexican talent be encouraged to stay in
Mexico after graduating and not leave to work abroad?
A: CONACYT has several programs to retain and attract
highly qualified human capital. One is the Professorships
for Young Scholars Program that incorporates young
people into the country’s research system. Currently,
there are 1,298 professors distributed across universities
and research centers, focusing on various topics.
We also have repatriation and retention programs.
Additionally, we have the Program for the Incorporation
of Postgraduates into the Industry. This program has
been developed to facilitate the employment of trained
professionals to promote competitiveness and innovation.
For this program, CONACYT contributes half the salary
of the selected candidates.
Q: How do Mexican science and medicine programs rank
globally? What more needs to be done to improve them?
A: This year we have 27 medical and health science
programs listed as “internationally competitive” in the
Mexican Postgraduate Quality Program. CONACYT
awards this category in recognition of a program’s
longstanding commitment to pioneering research, the
best quality in teaching, outstanding academic resources
with international standards, as well as international
collaborations with prominent institutions around the
world. As of March 2017, these programs had 292 students
with scholarships provided by CONACYT and they were
located in seven different institutions in five states. There
were also 25 internationally competitive programs in the
fields of biology and chemistry with over 1,500 CONACYT
scholarship holders.
To improve the quality of our programs, we have been
supporting the acquisition of scientific publications
and the expansion of infrastructure through different
funds. For instance, the national laboratories call
has funded several large initiatives in areas such as
radiopharmaceuticals and biotechnological medicines.
Q: In which areas applicable to health does Mexican
talent shine the brightest?
ENCOURAGING TALENT DEVELOPMENT THROUGH SCHOLARSHIPSENRIQUE CABRERODirector General of CONACYT
VIEW FROM THE TOP
311
and validation protocols for robotic devices for human
use. Similarly, the National Institute of Cardiology is
developing a coronary stent to aid the treatment of
coronary artery diseases. This project, supported by the
incentives to innovation program is in a preclinical phase.
It is expected to open new markets and trigger industrial
and commercial ventures due to its comparatively low
price.
Q: How is CONACYT working with international
organizations and institutions to showcase Mexican
talent abroad?
A: We have fostered international cooperation through
agreements with governments and institutions around
the world. We have signed more than 200 cooperation
instruments and we have supported high-impact research,
mobility and participation in international scientific
projects. Regarding medicine, we participate actively in
the Global Alliance for Chronic Diseases through global
projects. We are aware that health institutions play a
key role in research, so we support them in international
initiatives. For instance, we recently channeled a
£2.5million Newton Fund initiative to the Sectoral Fund
with the Ministry of Health.
Q: What are CONACYT’s main goals for the next few
years?
A: CONACYT has set objectives to guide our future
work, which include a more efficient and responsible
management of public resources and stronger
participation of the private sector and universities in
expenditure. We are committed to advancing niche
sectors in Mexican states and to working with the recently
formed consortium to promote regional development. We
will also continue to consolidate strategic international
alliances, as well as with the institutions of the Science,
Technology and Innovation System.
Regarding medicine, we are supporting the development
of translational medicine in particular regarding metabolic
diseases, in line with the national health priorities. We
also promote progress in preventive medicine, especially
regarding teenage pregnancy, maternal and child health
and infections associated with medical treatment,
including the indiscriminate use of antibiotics and the
subsequent rise in antibiotic resistance, a rising threat
worldwide. Mexico is also following suit in global efforts
to develop personalized medicine.
program related to medicine or health sciences increased
by 43 percent between 2012 and 2017. The number of
programs connected with medicine or health sciences
registered in the quality graduate programs listing
jumped from 207 in 2012 to 365 in 2017, an increase of 76
percent. The number of researchers related to medicine
or health sciences registered in the National System of
Researchers increased by 60 percent from 2013 to 2017.
In addition, the implementation of the professorships for
young scholars program has created new academic jobs
throughout the country. This has been an outstanding
program to support research in Mexico.
Q: CONACYT supports certain companies. What criteria
does it use to select them?
A: To fund a project, CONACYT evaluates all submissions
and then selects the best ones, prioritizing those that
belong to strategic areas such as health, pharmaceutics,
bio and nano-technology, aerospace, automotive and
energy.
The incentives to innovation program is an instrument
to support projects that aim to develop new products,
services or processes or to improve existing ones based
on technological advances. We have already completed
eight competitive calls, supporting 5,549 projects
with a total budget of approximately US$1.6 billion,
which means an average of US$201,000 per year. Two
hundred and forty projects (4.3 percent) were related
to pharmaceutical areas. These projects received a total
US$55 million. We can also include health projects, of
which there were 259 (4.7 percent of total projects
funded) and US$81.5 million. Additionally, the program
supported 25 projects related to medical devices with
US$7.7 million.
Q: Which are the most promising projects being
developed in conjunction with or with grants from
CONACYT?
A: We are in the last stages of the creation of a consortium
in translational medicine to facilitate the application
of knowledge obtained from clinical trials and basic
research to produce new pharmaceutics, treatments and
prevention systems. The Ministry of Health and UNAM are
also taking part in this project.
In addition, we have projects for the design, synthesis
and preclinical validation of new treatments to prevent
drug abuse. The preclinical phase has already concluded
and the clinical phase is next. The treatments are being
developed in the National Institute of Psychiatry and are
supported by the Sectoral Fund of Research in Health
and Social Security (FOSISS). Furthermore, people at
the UNAM are developing affordable hand prosthetics
The National Council of Science and Technology (CONACYT)
is a government entity that aims to increase quality,
competitiveness and innovation of companies in its areas of
focus. It is known for offering scholarships to students
312
25 percent of our researchers are not from Mexico and
around 70 percent have studied abroad.
Q: Why do these students return to Mexico?
A: Until recently, part of that may have been the high
salaries CINVESTAV pays its researchers. There is also easy
access to students here, yet this is not expensive because
most students have scholarships paid by external agencies,
like CONACYT. This is unlike what happens in other North
American universities, where a graduate student needs to be
directly financed by the project being researched.
Q: Researchers often publish before considering IP, losing out
on patents. To what extent does this happen at CINVESTAV?
A: Publication is vital for a researcher’s career development
due to the national academic evaluation system in Mexico. We
have an office of technology transfer within the institution,
which in some cases contacts a researcher to delay
publication and generate a patent beforehand. Our policy is
that if a product or development does not have short-term
commercial potential, it is not convenient for the institution to
file patents, whereas scientific publication is a valuable asset.
We only filed 44 patents in 2016.
The time and resources needed to conduct clinical trials are
sometimes beyond the scope of an educational-research
institution like CINVESTAV. For example, we have a joint
patent with UNAM and the Autonomous University of Morelos
State for a medicine derived from amphotericin, a powerful
mycotic that can be used as a last resort for infections but with
a high mortality rate of almost 50 percent. In preclinical trials,
the lethality of the new compound we developed in animals
was under 5 percent. To make this a commercial medicine,
we must conduct clinical trials and even associated with the
other two universities the costs are significant: it would cost
around US$3million.
Q: To what extent does CINVESTAV have preferred
partnerships to carry out these trials?
A: We work with hospitals, particularly with the IMSS and
ISSSTE systems, and several hospitals that are part of the
Ministry of Health, such as Hospital Juarez. The characteristics
Q: CINVESTAV operates in 12 health areas. Which are the top
three for the Mexican healthcare market?
A: The largest is probably pharmacology but we also have
significant operations in genetics and molecular biology,
which helps us touch on more modern themes such as
translational medicine, genomic medicine, metabolic diseases
and chronic-degenerative diseases. In addition, infectology is
another important area, due to the rise of emergent infectious
diseases. Our infectomics and genetics departments are
working on zika and chikungunya. It would appear that these
infectious diseases are no longer a main health concern for
Mexico but it necessary to remain vigilant.
Q: What is your ideal student profile?
A: It would be a student with a solid foundation in
biology, mathematics, chemistry and physics and with
strong communication skills. We base our admissions on
propaedeutic processes and, at the end of the courses, we
choose the best students. This gives us time to homogenize
our student population and to measure the students’ work
capacity. Around 25 percent of our students who have studied
medicine want to move into research; around 50 percent are
biologists and another 25 percent come from other areas such
as chemistry or engineering.
Q: What is your strategy to strengthen the international
competitiveness of Mexican researchers?
A: The Ministry of Public Education gives us specific funds for
mobility, which differentiates us from most universities and
research centers and enables over a thousand of our graduate
students and faculty members to participate in annual short-
term visits abroad. These visits are often based on long-term
collaborations and increase our international presence.
Since CINVESTAV was founded, our strategy has been
to bring in the highest quality researchers. Currently,
PIONEERING MEDICAL ADVANCESJOSÉ MUSTRE DE LEÓNDirector General of CINVESTAV
VIEW FROM THE TOP
The Center of Research and Advanced Studies (CINVESTAV) is a
respected research institution headquartered in Mexico City that
also offers postgraduate and doctoral degrees. It has a strong
focus on health, as it was originally established by a cardiologist
313
already been published. The project began in 1985 by
documenting physics research in Mexico, then it grew
to be Inter-American and around 10 years ago it was
decided this would be useful for all areas. This project
is supported by the Mexican Academy of Sciences and
CONACYT.
Q: What are CINVESTAV’s priorities for the Mexican
healthcare industry in 2017?
A: In 2017, our priorities will not change, unless there is
an epidemiological emergency. The main focus will be on
chronic and degenerative diseases, such as Alzheimer’s
and Parkinson’s. In addition, we will try to start the
construction of a center to study the effects of aging.
Specifically, this is important for Mexico City because it
has the highest proportion of elderly adults. This may be
because healthcare is better here than in other places,
enabling people to live longer. This is a joint project with
the government of Mexico City.
Q: What is an example of a project executed in the
institution?
A: A special technique for cultivating human skin cells
was developed around 2009. This project was expected
to be for mass-use, to cultivate macroscopic tissue to
treat serious burn cases. The main issues with these cases
are dehydration and infection, so the affected areas need
to be covered as quickly as possible. Because of this
project, 50x70cm expanses of tissue could be routinely
produced. This technology was licensed to BioSkinCo, a
Mexican company based in Guadalajara. The product has
been successful but it could have more impact. However,
the public health system in Mexico has not been able to
adopt the product, perhaps due to costs. The royalties
from projects such as this one help us finance other
research initiatives.
of CINVESTAV do not allow us to attend patients directly. We
think this is an advantageous partnership because it enables
our research to have an immediate impact on patients and it
also enables medical doctors at those hospitals to have access
to leading technology.
We also have the most modern vivarium in Latin America,
winning an award in 2016. We have several transgenic species
in it, such as rats genetically modified to have diabetes so we
can study the effects of the disease, a unique case in Mexico.
Q: What is the importance of health for CINVESTAV?
A: Around 30 percent of our researchers work in health, 25
percent of our published articles are in health and the area
is allocated around 30 percent of the budget. However, the
impact on human resources is greater: around 42 percent
of our students work in health. We may have 15-20 new
admissions every year in our physics department but around
100 in molecular biology and we are turning 70-80 percent
of applicants away.
We have a National Laboratory for Genomics and Biodiversity
(Langebio) at CINVESTAV on our Irapuato campus. Our
genome sequencing capabilities are the largest in Latin
America. We created this laboratory between 2005 and
2015 and we were the first group worldwide to sequence
the genome of corn. In Monterrey, there is a group working
in biomedical physics and engineering to design medical
devices. They are working on a new x-ray tomography
machine that complements imagenology techniques such as
nuclear magnetic resonance imaging.
Q: CINVESTAV is compiling ATLAS, a history of Mexican
science. What is the importance of this compilation?
A: ATLAS clearly documents various collaborations in
all areas. This is an ongoing process, but part of it has
314
EXPERT OPINION
ACADEMIC MEDICINE: OPPORTUNITIES FOR COMPETITIVENESS AND DEVELOPMENTJORGE VALDEZDean of the School of Medicine and Health Sciences of the Tecnológico de Monterrey
Medicine faculties traditionally stick to teaching only the
field of medicine, but Tecnológico de Monterrey’s School
of Medicine and Health Sciences teaches other areas of
the medical field like biomedical engineering, nutrition
and wellness, clinic and health psychology, health care
management and odontology. We also offer a variety
of master’s, specializations and doctoral programs.
Tecnológico de Monterrey applies the “clinical professor”
model, because being a docent is necessary to be part of
an AMC. All physicians that have an office in the Academic
Health Center of the Tecnológico de Monterrey are required
to be part of the clinical professor model as well and be
certified by each specialty’s national council.
There have been advancements in medical education
through cooperation between public and private universities
in Mexico in organisms like the National Association of
Universities and Institutions of Higher Studies (ANUIES) and
the Mexican Association of Faculties and Schools of Medicine
(AMFEM). In the latter, universities created the competence
profile of the Mexican general physician, a manual listing
competences all medical professionals must have, and the
incremental quality model, which enables the raising of
quality standards in medical human resource formation.
We need to develop our own abilities, retain and attract
talent from elsewhere. AMCs are necessary to retain and
attract medical talent and to be competitive. A national
strategy is necessary to make academic medicine the
objective of schools of medicine nationally. There are some
AMCs in Mexico, such as Centro Médico Siglo XXI, national
institutes of specialties, the university-hospital of UANL
and those operated by the Tecnológico de Monterrey in
Monterrey, Mexico City and Guadalajara. The development of
AMCs is an area of opportunity that requires combining the
strengths of public and private organizations. It can attract
investment both from the private and public health sectors
and from abroad. It is necessary to intervene and promote
research given the challenges health problems in Mexico
present and to push the government to allocate more funds
to health. Together, these steps can create a virtuous cycle
that improves the development of the country.
The School of Medicine and Health Sciences of the
Tecnológico de Monterrey practices academic medicine
conducting medical research and educating students while
caring for patients. This fundamental triple helix enables us
to form internationally competent, humanely sensitive and
entrepreneurially spirited medical professionals.
The Tecnológico de Monterrey and other universities
promote the creation of Academic Medical Centers (AMCs),
medical associations with an international branch, to
boost academic medicine. They are composed of one or
more hospitals, a school of medicine and health sciences
and some research elements. Health science students in
AMCs do not only receive practical education and acquire
experience in care-giving but also come into contact with
medical research, which provides a foothold for a virtuous
cycle that advances research, care and education.
Bettering medical education and advancing academic
medicine in Mexico and Latin America are huge areas of
opportunity. The QS World University Ranking 2017 in
medicine includes only 25 Latin American and four Mexican
universities. There are 150 faculties and schools of medicine
throughout Mexico, but less than half are accredited by
the Mexican Council for the Accreditation of Schools of
Medicine (COMAEM). We cannot aspire as a country or
region to be competitive on an international level without
the creation of processes of certification and accreditation
that validate the quality of the care we deliver, the research
we perform and the education we provide.
We cooperate with AMCs around the world to form
internationally competent professionals. The hospitals we
operate have national and international accreditations of
warmth and quality as measured through patient experience.
All physicians working in them are certified. Our educational
programs, like all regular medical schools, are certified
by COMAEM and all 16 of Tecnológico de Monterrey’s
specialization and the two doctoral programs are on
CONACYT’s Quality Graduate Programs Register. Finally,
70 faculty members are a part of the National Researchers’
Institute (SNI) and work in seven strategic approach groups.
315
Q: How is the UNAM School of Medicine working with the
government to this end?
A: This is a situation in which the solution does not lie solely
with the School of Medicine. We strive for our students to be
the best prepared and to be competitive in their respective
fields and to have the necessary competencies aligned with
the epidemiological profile of Mexico. The labor issue does
not necessarily depend on us. We are working closely with
the Ministry of Health and health agencies. It is not a new
nor an easy problem. It has to do with the health system
itself and the healthcare model. The Ministry of Health
has proposed a new model of care, which we hope will be
successful in increasing job openings. We are proposing
several solutions. One of which is to train
medical doctors with a family medicine
specialty, adding a couple of years to the
core medical curriculum to make it a nine-
year combined studies program.
Q: Apart from the medical specialty, what
skills do employers look for and how is
UNAM meeting this demand?
A: The reality of the situation is that the
main focus in hiring is in meeting the academic demands.
There are instances, such as medical institutes or highly
specialized IMSS hospitals that require other characteristics
such as highly technical knowledge and a research
background. The competencies of other areas are difficult
to evaluate but the most important role of a doctor is the
human aspect. This may be one of the most important
elements, sometimes even more than technical abilities.
A patient does not know if we are providing the correct
treatment or choosing the right study. They pay attention to
how they are treated. The doctor’s focus is on the technical
side and patient’s focus is on the human aspect. Therefore,
our main goal is to include both in medical education.
Q: What is UNAM doing to ensure students get the best job
offers in Mexico and do not feel the necessity to leave the
country?
A: Several years ago, the Brazilian government, due to a
lack of general medical doctors, brought Mexican medical
doctors to Brazil. Generally, doctors that go abroad do so to
specialize and are usually the elite. They leave to take medical
licensing exams in the US, Canada or Europe to obtain their
specialization or subspecialty.
The problem is not that our doctors are going abroad
but rather, the challenge lies in providing adequate job
opportunities at home. Mexico produces around 14,000
physicians per year in approximately
140 medical schools but, in general,
Mexican physicians do not receive
employment offers from abroad.
Recent graduates have little interest
in becoming a general practitioner
and they focus on obtaining a
specialization, which is a reflection
of the labor market as, for example,
IMSS only hires medical doctors with a
specialization, particularly because its healthcare system
is geared toward family medicine. IMSS attends around
70 million Mexicans, which means that roughly half the
health system is blocked to the general practitioner as this
system impedes them from accessing jobs in this sector.
The Ministry of Health of each state and ISSSTE have
opened few vacancies for general practitioners. Therefore,
a general medical doctor has limited opportunities to
enter the workforce.
Options for a recent medical graduate include specializing,
which is what the majority aspire to. Around 40,000
physicians applied for the National Residency Exam in 2016,
competing for about 8,000 places. This varies by specialty
as some have greater demand, such as ophthalmology or
otorhinolaryngology. This leaves around 30,000 without a
specialization. Some of these doctors go into private practice
in general medicine but others are being hired as pharmacy
consultants, with around 15,000 positions available.
ADAPTING TO THE HEALTHCARE SYSTEM
GERMÁN FAJARDODean of the School of Medicine at UNAM
The School of Medicine at the National Autonomous University
of Mexico (UNAM) is one of the most prestigious and recognized
in Mexico and Latin America. It encompasses nine departments,
including public health, pharmacology and surgery
14,000the number of doctors Mexico
produces per year in around 140
medical schools
VIEW FROM THE TOP
316
GENDER PAY GAP PROMINENT IN MEXICAN HEALTHCARE
One issue with healthcare in Mexico is access, which is in
large part linked to purchasing power. The Global Gender
Gap Report 2016 by the World Economic Forum places
Mexico 122nd of 144 countries for gender equality in
economic participation and opportunity and 128th of 135
countries regarding wage equality.
“[A] priority in terms of public health is the lack of access
to healthcare and pension funds for women who work in
the informal sector. This is also the situation for all those
women who have to stay at home to take care of family
members who are sick or who have a disability
or chronic illness. In Mexico, more and more
people are living longer while suffering from
chronic diseases and women are usually
responsible for this care because there are
no public services offered to these patients,” says Ana
Güezmes, the representative for UN Women Mexico.
On average, Mexican women perform four times as much
unpaid work as Mexican men. This translates to around 112.6
minutes per day for men and around 373.3 minutes per day
for women, according to the OECD. Within the healthcare
sector itself, the gender pay gap is stark: on average across
fields men earn MX$65.6 (US$3.6) per hour, compared to
MX$51.1 (US$2.8) for women, according to the National
Institute of Women (INMUJERES), a government entity.
ANALYSIS
Access to health in Mexico is in large part determined by
economic factors, yet half the population is on average paid
less, based on gender. This remains true even within the
healthcare sector itself, which is usually seen as more equal
0
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AVERAGE INCOME PER JOB BY GENDER (MX$ per hour)
Source: INMUJERES
Over MX$25,254
From MX$17,046 to 25,254
Under MX$17,046
MEN
Over MX$25,254
From MX$17,046 to 25,254
Under MX$17,046
women
Over MX$25,254
From MX$17,046 to 25,254
Under MX$17,046
TotalMONTHLY SALARY RANGES FOR HEALTHCARE SECTOR WORKERS
AVERAGE INCOME (MX$ per hour)
Men
� Men
� Women
—Average
Women Total
� Under MX$17,046 (US$947)
� 75.9%
� 14.8%
� 9.3%
� 82.6%
� 11.7 %
� 5.7%
� 79.9%
� 12.9%
� 7.1%
� From MX$17,046 to 25,254 (US$947 to US$1,403) � Over MX$25,254 (US$1,403)
317
INSIGHT
Companies increasingly face the challenge of not only training
new talent but retaining that talent and keeping professionals
up-to-date amid rapid changes. In addition to financial
incentives, healthcare companies can turn to organizations
like the Continuous Medical Education Institute (IMC) for help
and guidance.
“We are an ally and a strategic partner for our clients because
given the constant changes in the industry, companies cannot
cope with the amount of training they want and need to
provide for their staff,” says Marlene Llópiz, CEO of IMC, which
offers custom-made solutions to prepare human capital in the
pharmaceutical, scientific and medical industries.
The Institute provides different services, adapted to
each of its clients’ needs, such as advisory boards,
focus groups and continuing medical education courses.
According to Llópiz, most of the companies that look for
these services are pharmaceuticals, hospital groups and
public institutions, such as ISSSTE and IMSS. “We had
a summit on vaccination for the elderly which several
pharmaceutical companies participated in, as well as
the National Geriatrics Institute (Instituto Nacional de
Geriatría). The final result is an upcoming publication in
the Gaceta Médica that will set national guidelines for the
vaccination of the elderly,” said Llópiz.
The topics chosen for the institute’s course catalogue and
events are usually hot topics in the industry, in this case,
geriatric care. In fact, since 2016, Mexico has been training
health professionals to provide geriatric care for specific
diseases like Alzheimer’s and dementia as part of the country’s
commitment with the PAHO plan.
Key among the goals and outcomes of these summits is the
exchange of knowledge among professionals, the access
to new information and the development of new ideas, but
mostly the writing and contributing of new policies that will
bring about changes in the healthcare sector at a corporate
and national level. “We are hopeful there will be a second
geriatric summit in 2019. We are also planning to host a
summit on nutrition for the elderly,” she adds.
These types of initiatives are favorable for the industry because
they motivate and promote the development of national
talent, which in Mexico has been drained by countries that
offer better academic opportunities. In Mexico, 85 percent of
science professionals who hold a post-graduate degree have
studied abroad, and many usually remain outside of Mexico.
Also, in 2012 Mexico saw the lowest investment in science
of OECD countries. However, companies are starting to take
action to retain that prepared talent. According to Llópiz,
many pharmaceutical companies have started providing
financial incentives to their workers based on the results
of compulsory academic courses, emphasizing a worker’s
responsibility for their education.
When a company wishes to work with IMC, the institute
prepares a proposal based on the client’s needs. Some request
training on a specific disease and treatment, to be delivered
during a determined period of time and for a certain type
of professional, whether related to market access, medical
training or for the sales forces. IMC can also help prepare
international exchange programs. “We are working on a
proposal for a company that would like to send a group
of oncologists to Spain to visit oncology centers and learn
about their experiences and exchange points of view and
treatment guidelines.” The institute is also organizing a summit
of ophthalmologists in Central America for retina experts to
develop national guidelines for this specialty for several Latin
American countries.
Because IMC’s solutions are tailored to the client, the
institute can work with private and public, national and
international, corporate, small and commercial companies
and academia. All ask for different services, but they have
one thing in common: the need for continued training and
up-to-date information. “The industry is very dynamic and
you have to always be willing to change with it. We used
to always talk about reference drugs for treating patients.
Then, generics came along and it was a revolution and a
new beginning for pharmaceutical companies. Currently, we
have biotechnological drugs on board. Therefore, both the
physician’s knowledge and strategies to promote pharma
sales have to be continuously updated.”
KEEPING MEXICAN TALENT AT HOME THROUGH TRAINING
MARLENE LLÓPIZCEO of IMC
318
which allows us to recruit nationwide in a timely manner.
We do turn to other sectors or young talent directly from
university, not due to a lack of candidates with experience
in our industry but mainly to meet our clients’ specific
requirements.
Q: What new skills do companies expect from their
future sales force?
A: Sales representatives should have the capacity to
manage their territory just as an entrepreneur would
do, negotiating at all levels with key opinion leaders
and pharmacies to optimize demand and ensure the
availability of a product at the points of sale.
Additionally, new candidates need digital skills to
effectively administrate all future communication
channels with their clients. As for district managers,
companies are looking for coaching skills to accelerate
the development of skills needed for the increasing
responsibilities of today’s sales force.
Q: What were Bacher Zoppi’s growth drivers in 2016 and
what are the company’s priorities for 2017?
A: It has been a challenge for Bacher Zoppi to compensate
for the industry’s reduction of the overall sales force head
count with new business opportunities. However, in 2016,
we exceeded our growth expectations with aftersales
services in hospitals, which represents the fastest growing
area of our business.
We have also developed and improved several services,
such as talent pools, training programs and other sales force
services for the pharmaceutical and healthcare industry.
We will continue to focus on developing and offering
specialized services for the pharmaceutical and
healthcare industry. Our added value is our expertise with
more than 20 years offering tangible results in real-time.
We are committed to exceeding client expectations. This
has enabled us to become the leader of our industry,
which has brought us much recognition and many
recommendations.
Q: How does the Mexican health talent market compare
to other industries?
A: The employee market in the pharmaceutical and
healthcare industry is still highly attractive, precisely
because of preferential conditions compared to other
industries in terms of compensation packages, benefits,
training programs and career plans.
Bacher Zoppi has been a pioneer in offering specialized
services for the pharmaceutical and healthcare industry
for more than 20 years. Due to our solid processes and
compliance with the requirements of the industry as well
as the authorities, a great number of companies prefer
our talent pool and staffing services to hiring new sales
talent. We recruit around 1,500 people per year, which
makes us one of the main employers in our sector.
Q: To what extent has the rise of digital technology
impacted recruiting for in-person visits?
A: Digital technology has not produced a significant
variation in the number of people being recruited to
perform in-person visits. However, we are fully aware
that the industry is evaluating and implementing digital
technology to increase the promotional impact and to
continuously optimize marketing and sales expenses.
Q: Does the existing talent pool in the health industry
meet your needs or must you turn to other sectors?
A: We have a vast variety of job profiles since our clients
define or at least approve the characteristics for each
vacancy. The importance of finding the specific talent
for each position according to the characteristics of each
company is a key success factor for Bacher Zoppi. We
have our own experienced and specialized recruiting
team across Mexico and maintain an updated database
with more than 20,000 commercial and sales candidates,
SPECIFIC TALENT FOR SPECIFIC COMPANY CHARACTERISTICSDOMINIK BACHERCEO of Bacher Zoppi
VIEW FROM THE TOP
Bacher Zoppi, a Mexican outsourcing company, recruits sales
forces for pharmaceutical and healthcare companies. It was
founded by Swiss entrepreneur Dominik Bacher and former
Novartis Commercial Director Reto Zoppi
319
is necessary for management positions. For private sector
sales, we look for soft skills. However, for both clients, flexibility
is mandatory because the health market always has different
opportunities. With sales, it is important that applicants can
highlight the advantages of the products, because selling is
not about prices or competitiveness but what the patient can
get from the drug or the equipment.
We are also living in a world of mergers. We have many
Big Pharma brands in the process of downsizing, so they
have to do more with fewer people. For each person, this
translates to more work. Before, product managers focused
on one medical device or a single group of products. Now,
they deal with larger portfolios.
Q: How important are soft skills over traditional medical
skills?
A: Medical skills are much appreciated but those who have
been working in the industry for 15 or 20 years have gained
knowledge from their experience. They may not have a
medical background but most unit directors have excellent
medical knowledge. It is not possible to have a successful sale
to a hospital or IMSS if you cannot detail the benefits for the
patient and the pharmacoeconomic information of a product.
Q: Hays is the number one staffing firm on LinkedIn. What
role does social media play?
A: It is extremely important. The digital age allows the most
direct and fastest way to reach our audience with quality
specialized information. We try to be visible to our potential
clients because in life sciences we only dedicate our time to
pharma and medical devices, which is unusual for staffing
firms. Therefore, we strive to be the first company to come
to a candidate’s mind due to our knowledge and opinion
leadership. This should make the difference for candidates
and clients in the market.
Q: What are the top challenges companies face in filling
jobs and what positions are most in need?
A: The main positions that need to be filled within the
pharmaceutical and medical devices industries are in sales
because of the high turnover, especially at entry level. A
specific difficulty in these sectors is specialization. These
areas require a high degree of specialization, product or
therapy knowledge as well as experience working with the
government (IMSS, ISSSTE, SEDENA, PEMEX) and the private
sector so talent from other sectors is not always appropriate.
Q: Where are companies finding that missing talent? Is it
coming from abroad?
A: Mexico is not so focused on importing talent yet. First,
companies have to be willing to import international talent
and then the laws of each country have to be flexible
enough to allow this, otherwise it will take longer to bring
the person over. The solution is to fill entry-level positions
and develop that talent through programs, as many have
done. Another solution is to use agencies like ours.
Q: To what extent are companies cooperating with
universities?
A: Most of our clients employ second and third-year
students through internship programs. Usually the students
are not paid but they gain experience, so it is a win-win for
both sides. At the master’s or doctoral level, internships
are often a program requirement and for companies it
is an opportunity to get to know future talent. However,
sometimes students enter a university program with a
specific plan and five years later, when they finish, the
industry is no longer in the same position as when the
program was designed. Still, the relationship between
companies and universities is a priority and an opportunity
to work together to solve the industry’s talent gaps.
Q: What skills do Hays and its clients look for and how does
that apply to the public and private sectors?
A: We consider hard and soft skills. When we look for hard skills
we go after people who have worked with the government
before, because it is composed of complex institutions that are
particularly different from private companies. This experience
SPECIALIZATIONS IN HIGH DEMAND
JUSTYNA KROPLEWSKASenior Consultant at Hays
VIEW FROM THE TOP
Hays is one of the world’s leading recruitment companies
with over 6,000 consultants in 33 countries working in 20
specialties, including accountancy, construction, banking,
education, health, legal, energy, retail and telecoms
320
INSIGHT
IMPROVING EMPLOYEE HAPPINESS, RETENTIONFRANCISCO HERNÁNDEZDirector of New Projects at Grupo Accses
High employee rotation is a notable issue in the Mexican
workforce and, more specifically, in the healthcare sector.
Francisco Hernández, Director of New Projects at Grupo
Accses, believes mental wellbeing is a key factor. Improve
that and improvement in retention will follow.
“Those that are happy at work, who feel appreciated and
protected, are more productive and more loyal to the
company,” Hernández says, adding that the level of rotation
also changes due to the level of income. “The higher the
income, the higher the level of rotation in specialized
clinics.” He also stresses that this can help attract new
employees in addition to retaining good talent. “Although
a company can advertise through social media such as
Twitter and Facebook, another way to advertise is with
happy employees,” he adds.
Mental health, and good health in general, depend on more
than pills and doctors’ visits, Hernández says. Intangibles
such as happiness and mental balance play a major role.
“When a person is emotionally stable and well, they are
less likely to get any type of illness. Depression and stress
are doorways for illness,” he says. The NHS reports that
stress has a variety of emotional, mental, physical and
behavioral symptoms including inability to concentrate,
headaches, sleep problems and irritability.
Grupo Accses’ core activity is overseeing company
payrolls but it differentiates itself by providing additional
services to the employees on the payroll. In May 2017, it
launched its Access to Health Life program, which will
provide affiliated employees with discounts through
alliances the company has made with specialized medical
services, pharmacies, laboratories, spas, restaurants and
other entertainment venues.
Hernández is hoping this will help lead to healthier employees.
Improving an employee’s wellness and satisfaction can help
reduce absenteeism and the lesser-known presenteeism,
both important problems in Mexico. “Recent statistics from
the Harvard Business Review show that most personnel
rotation is due to reasons other than income. Around 40
percent of people do change jobs because they do not earn
enough, but the rest leave for other reasons such as bad
bosses or not feeling appreciated,” Hernández says.
A London School of Economics report quoting a
2016 Evans-Lacko study states that depression costs
Mexico over US$14 billion in lost productivity and that
depression-related presenteeism costs Mexico US$11.3
billion. The same study showed that Mexicans are likely
to keep working during depression, thus impacting their
productivity and performance.
Grupo Accses’ Access to Health Life program will first be
rolled out to the 3,600 employees already on the company’s
payroll. It will then be rolled out to other companies and their
employees, which Hernández says is easier to do once Grupo
Accses shows it cares about the wellbeing of their clients’
employees. The group will also look for more partnerships
to improve its offering. “We are looking for partners with
the ‘wow’ factor, the one that takes people out of their daily
routine.” It also looking to eventually offer funeral insurance.
“When a person is young, it does not matter but when you
have a family, worrying about this type of thing impedes
happiness and influences the company’s vibe.”
2.7% DON'T KNOW
2.3% 21+DAYS
0.4% 16-20 DAYS
2.6% 11-15 DAYS
2.7% 6-10 DAYS
23.8% 1-5 DAYS
65.6% 0 DAYS
MEXICAN EMPLOYEES ARE LIKELY TO KEEP WORKING DURING AN EPISODE OFDEPRESSION, IMPACTING THEIR PRODUCTIVITY AND PERFORMANCE AT WORK
IN THE MIDDLE OF THE DONNUT :DAYS TAKEN OFF WORK DURING AN EPISODE OF DEPRESSION
� 65.6% 0 days
� 23.8% 1-5 days
� 2.7% 6-10 days
� 2.6% 11-15 days
� 0.4% 16-20 days
� 2.3% 21 + days
� 2.7% Don't know
Mexican employees are likely to keep working during an episode of depression, impacting their productivity and performance at work
DAYS TAKEN OFF WORK DURING AN EPISODE OF DEPRESSION
Source: Evans-Lacko, S. & Knapp, M. Soc Psychiatry Psychiatr Epidemiol
321
INSIGHT
the executive roles they deserve, despite their experience.
There is sometimes machismo,” he adds.
Regarding the health industry in general, Pérez is confident
despite recent budget cuts, which have led to fewer
changes in executive management. “I believe the industry is
evolving favorably, even with the challenges it faces, many
of which are related to the lack of government budget,
inclusion difficulties and the talent war,” he says.
The main issue in executive talent in the life sciences and
healthcare industry is retention, which has led to companies
paying bonuses to keep people, which in turn creates
internal inequality issues and eventually leads to talent wars.
This war happens on social media, as now employees are
not just poached from within the country’s industry but
from abroad, too. “There are many Americans, Colombians
and Venezuelans in the pharma sector at all levels. I think
Mexico needs to send more people abroad,” Pérez says.
Some companies are prepared to bring in talent from other
sectors, he says when discussing the trend of bringing in
new blood, be it from other industries or other countries.
About 80 percent of a successful integration depends on
acclimatization with the company’s culture. For this reason,
he says, some companies bring in executive talent from
other subsidiaries or branches to fill a position.
Pérez emphasizes the importance of creating a balance
of talent on a team. “What is needed is the necessary
experience, the personal characteristics, the executive
competencies, which you either have or do not have, and
finally the cultural fit,” Pérez says. “The health sector has a
good reputation as it is seen as dynamic.”
In the next five years, Pérez expects the industry to continue
evolving to provide better coverage and to keep striving for
efficiency while maximizing investments. Diversity will also
play an important role. “This is important for me. We need
to give Mexicans more exposure abroad and, as a country,
we need to become more attractive to encourage these
people to return to Mexico,” he says.
Despite many advances in the last decades, gender
equality is still an issue in the business world. Boardrooms
are mostly filled with men and many women feel pushed
out or held back because of their gender. In September
2016, research institute Catalyst analyzed the number of
female CEOs at S&P 500 companies. The result? Twenty-
three or just 4.6 percent. It also showed women hold only
19.9 percent of those companies’ board seats.
Mexico is no stranger to this level of inequality, including in
the health industry, says Ignacio Pérez, Managing Director
of top-executive recruiter Heidrick & Struggles. “You could
count the number of female director generals on your
hands in the health sector,” he says, “and 60 percent are
not Mexicans. We need more female executives.”
Heidrick & Struggles’ Life Sciences and Healthcare
Practice manages the executive talent needs of all manner
of healthcare companies, including medical devices,
pharma and hospitals. The firm is a sponsor of the World
Economic Forum, which in its 2016 Global Gender Gap
Report placed Mexico 128th on its 144-country list of wage-
equality indicators.
Pérez stresses the importance of diversity in the
boardroom in gender, background and competencies, and
says companies are making a mistake if they continue
this trend. “We see many companies in which women
earn less than their male counterparts. This should not
be. It is a total error of talent management,” he says,
while emphasizing that women should be judged on their
performance and talent, not on their gender. According to
the OECD, the gender pay gap in Mexico was 16.7 percent
of the median male wage.
Women also need the same training and exposure as their
male counterparts if they are to be promoted to executive
positions. “There should be equality of opportunities, not
quotas, which simply create unneeded positions,” Pérez
says. Still, even if women have the training and experience
there is another obstacle to overcome: machismo.
“Sometimes employers are not prepared to place women in
DESPITE ADVANCES, GENDER EQUALITY STILL AN ISSUE
IGNACIO PÉREZPartner at the Consumer, Life Sciences
and Healthcare Practice of Heidrick & Struggles
322
ANALYSIS
THE QUALITY OF HUMAN TALENT SPECIALIZED IN HEALTHJORGE VALDEZDean of the School of Medicine and Health Sciences of the Tecnológico de Monterrey
of medicine have been recently created, 13 of which are
public while 37 are private.
At a postgraduate level, according the Interinstitutional
Commission for the Training of Human Resources for
Health, there are 27 medical specialties available to study
in Mexico. In 2016, 7,810 students were admitted to a
university course for medical specialization, according to
figures from the National Examination for Applicants for
Medical Residencies (ENARM). At a master’s and doctoral
level, schools are adopting the philosophy of training health
researchers. This is due to the curricular and methodological
value of the structure of these programs. In terms of
academic excellence, as of May 2017 of the 510 active
medical specialization programs, 189 were accredited and
recognized in the Registry of National Program of Quality
Postgraduates (PNPC), which forms part of CONACYT. The
practice and execution of the medical profession does not
end with graduation. CONACEM administers the regulation
for certification and renewal procedures, so specialists can be
responsibly evaluated according to norms and procedures.
Boosting and solidifying the quality of the specialized
training that human talent receives in the health sector and
enhancing excellence in the provision of health services
will only be possible if the problems of quality vis-a-vis
medical education are addressed. Faced with a lack of
quality models in medical programs and a high level of
service in medical care for epidemiological diseases, the
Model of Quality for Schools and Faculties of Medicine
stands out. It is based on the theory of the management
of quality, accreditations and rules for medical education.
This methodology takes into account the five levels of
an incremental quality model (beginning, development,
standardization, innovation and sustainability) and it is
structured with guiding principles aligned to leadership and
planning, program and research design, students, integral
education, facilities, links to other institutions, evaluations,
continual improvement and results. The schools of medicine
in Mexico are at the standardization level and, as an added
value, this model can serve as a guide for improving how we
position ourselves regarding innovation and sustainability.
In the last decade, medical students have shown great interest
in acquiring specialized clinical knowledge that enables them
to contribute to the competitiveness of the public and private
health sectors. It is imperative that the authorities regulating
medical education help to create an appropriate atmosphere
by providing quality guidelines for academic programs.
The determination of Mexico’s human talent to begin a
university degree in general medicine shows an inclination
toward continual growth. This has translated into over 100,000
medical school applications yearly and around 20,000
admissions nationally. According to the Higher Education
Scholastic Population Yearbook of the National Association of
Universities and Higher Education Institutes (ANUIES), there
were 126,296 students studying medicine across all years, of
which 14,781 finished their studies and 13,084 were granted a
degree during the 2015-2016 school year.
Considering these statistics, it is imperative that the leaders
and visionaries of the national medical education and
labor market offer the general population a catalogue of
professional programs that impart quality and academic
excellence at undergraduate and postgraduate levels. It is
to this end that the National System of Accreditation (SNA)
and the Council for the Accreditation of Higher Education
(COPAES) enjoy the privilege of conferring official recognition
to the organisms that accredit academic programs in Mexico.
Responsibility for accrediting academic programs
specifically developed by schools and faculties of medicine
at the undergraduate level falls to the Mexican Council for
the Accreditation of Medical Education (COMAEM). The
accreditation process focuses on a general methodology
of evaluation, a benchmark and quality indicators. In March
2017, 142 schools and faculties of medicine were registered
with COMAEM, 49.3 percent of which were accredited: 41
public and 29 private entities. The Mexican Association of
Schools and Faculties of Medicine (AMFEM) is responsible
for promoting innovation in training, care and research
models that connect the local to the global. As of April
2017, there were 100 schools and faculties of medicine
affiliated with AMFEM. In addition, 50 schools and faculties
323
A: The network follows a global health science academic
model. This learning model was created nine years ago and
the results have been positive. The model has several pillars,
one of which is educational technology. Our students have
to use technology while learning because it is important for
diagnosis and patient treatment.
Another important pillar of the model is learning
through simulation because we are focused on training
professionals with a high level of expertise and who
know how to think critically and solve problems based on
scientific evidence. Our campuses have simulation centers
that help develop skills and clinical competencies. We are
the first university to integrate this type of program and we
are the only global group with interdisciplinary simulation.
We use this as a tool not only for teaching medical skills
but also to help our students develop communication skills
through doctor-patient role plays. Having knowledge is
not enough: it is important that students can apply that
knowledge. This method guarantees security for patients
because if we can prepare professionals to deal with
real scenarios, we can be more certain of the quality of
professionals we graduate.
Q: What opportunities does Laureate International
Universities provide its member universities?
A: Being part of an international network provides several
academic and professional opportunities. First, we receive
constant feedback from other institutions because the
network helps strengthen knowledge among the branches
— we can learn from other countries’ problem-solving skills
and evolution strategies.
Belonging to the Laureate network also provides
opportunities for teachers to go abroad for research at
other universities and for students to go on exchanges.
Q: How is Mexico positioned to meet demand for medical
degrees and which areas are attracting the most attention?
A: Globally, there is growing demand for medical degrees.
The same is true in Mexico but we lack the resources to
meet demand. In some states, there are too few clinical
sites available for the number of people interested in the
degree and Mexico needs more physicians. Every time a
new medical school opens it is filled to capacity. Veterinary
degrees are also gaining a lot of interest. We only offer this
degree on two campuses, but we have expansion plans.
People with technical degrees, such as nurses or
physiotherapists, are also interested in obtaining a more
professional education. We have a post-graduate program on
health management, for example, to train doctors who already
own a consultancy on how to administrate their business.
Another area of high demand in the health sector is for
specialization programs. Ninety percent of Mexican medical
students want to earn a specialization but there are not
enough spaces and even less so for nutritionists and
physiotherapists. In general, many health professionals
cannot access the specialization they want, which is an
important issue we have to address.
Q: How does Mexico’s education in health sciences
compare to other countries in the region?
A: There are areas in which Mexico is advanced and there are
others where we lag. The Del Valle University (UVM) health
science programs are available on 30 campuses. Fifteen years
ago, we were the first to offer a bachelor’s in physiotherapy
and we have granted degrees to 80 percent of Mexico’s
physiotherapists. However, in Brazil physiotherapy has been
a regulated profession for 50 years. Even though we are 35
years behind, it will not take us long to catch up to other
countries. Professionals are requesting more opportunities to
specialize, which is a great step for the development of the
healthcare system. We are trying to increase the number of
bachelor’s and master’s degrees in our portfolio.
Q: How are academic offerings adapted to the changes in
healthcare management and practices?
A NETWORK OF EDUCATIONAL OPPORTUNITIES
SIMONE SATOVice Rector of Health Sciences at Laureate International Universities
VIEW FROM THE TOP
Laureate International Universities is a global network of 70
campus-based and online universities. In Mexico, Del Valle
University and the Technological University of Mexico belong
to the network
324
Continuous medical education constitutes a broad
concept closely related to professional competency. It
is a serious need for physicians because of the incessant
output of knowledge from biomedical research that
continuously challenges our paradigms about health
and disease and implies notable involvement for medical
practice when describing the pathophysiology, diagnoses
and treatments of every disease.
Among the different stages of medical education,
practitioners are forced to follow a continued learning
process to keep up-to-date on the knowledge and skills
that ensure they will be successful professionals of
outstanding proficiency. For physicians, it is key to train
with strict and critical thinking through life-long learning.
They should also be able to embrace methods of science
into their practice, such as critical analysis.
Medical training needs to be assessed as a compilation
of different types of knowledge, integrating experience,
practice and accurate scientific background. It
encompasses all the learning experiences physicians
have with the conscious intention of habitually and
persistently improving their proficiency. Education given
after graduation entails a higher educational challenge.
At this stage, the physician should decide on his own
the most appropriate methodology and content for his
or her learning either as a formal education course or
by selecting in detail the contents and dates through
continuing medical education.
Formal graduate education is focused on intellectual
production. It has its own selective character and is
nationally regulated and performed only by certain
institutions. Nonformal graduate education, such as
continuous medical education, has a nonselective profile
and distinguishes itself by its flexibility and simple
regulation. It is a clear and defined activity that supports
the professional development of physicians and leads to
improved patient outcomes. Continuous medical education
is a self-regulated manner to ensure clinical competence
and it shapes the growth and development of physicians.
Nevertheless, this modality has not figured in universities
with the appropriate force, despite its essential role. It is our
vision that continuous medical education will effectively
assist physicians in the generation, translation, diffusion,
critical appraisal and utilization of new knowledge
that contributes to high-quality, compassionate and
cost-sensitive care for patients. It encompasses those
learning activities performed after graduation from formal
programs with objectives restricted to upgrading, and
generally are activities with a determined duration and
are carried out in traditional ways.
The aim of continuing medical education is to establish
a link between health professionals and the fast-growing
body of knowledge to gain the competences required for
optimal clinical practice. Postgraduate and continuing
medical education differ from undergraduate education
in that they go beyond increasing knowledge and skills
to improving physician competency and performance in
practice, ultimately leading to better patient health.
Continuous medical education encloses a system of
learning as an expression of intellectual creation. It is
controlled institutionally and targeted at graduate
medical professionals in the following forms: courses,
workshops, pre-congress courses, graduate seminars,
specialty conferences, scientific debates, diplomas and
studies whose contents are supervised and scrutinized by
highly trained professionals in a similar manner to peer-
review journals. Continuous medical educators must know
and be able to use the literature, must derive practical and
effective results that create or improve learning systems
and must continue their own professional training. In the
past two decades, the concept of self-managing one’s
knowledge has earned a special connotation in the
pedagogy field and the teaching-learning process.
It has been demonstrated that continuous medical
education formats differ in their impact in clinical practice
and in health professionals’ decision-making. Particularly,
those with higher impacts are those that use case-based
learning, small interactive learning groups, multifaceted
EXPERT OPINION
CONTINUOUS EDUCATION ENSURES OUTSTANDING PROFICIENCYMARLENE LLÓPIZ CEO of IMC
325
educational programs that combine different media and
the programs that are longer than one session. Magisterial
conferences and written materials by themselves do not
produce any change in clinical practice because of the
complexity of the changing process, and through these
actions only consciousness for the need for change can
be created.
There are specific programs of continuous medical
education and most have been institutionalized. In these,
the progressive diffusion of new information and internet
and communication technologies (ICTs), particularly
mobile ones, has had and is still having its effects.
Training schemes based on e-learning and on technology-
enhanced learning are increasingly widespread.
Internet-based continuous medical education has
components that differ from traditional continuous
medical education and can offer additional value for both
providers and participants. An element that contributes
to this added value is internet usage and high coverage
of ICTs, which have grown remarkably in areas such
as healthcare administration. This makes it possible to
take advantage of the increasing use of the internet and
mobile devices for educational purposes.
A key element of ICTs is their ability to shorten distances,
benefitting physicians who practice in remote and isolated
areas. Additionally, this enhanced geographical coverage
implies the availability of programs beyond borders, but
needs can change across borders and programs must
adjust to the needs of every community, incorporating
elements such as language, culture and health-system
limitations, but keeping in mind scientific evidence.
Another advantage is cost, as traditional continuous
medical education entails expenses such as facility
leasing, catering, stationery, audiovisual equipment,
transportation of staff and participants, while internet-
based continuous medical education can be organized
based on content, making it a more affordable learning
alternative.
The selection and design of the most relevant continuous
medical education is based on data from each physician’s
present professional responsibilities and performance.
One source to define specific content criteria to maintain
competency in a variety of specialties comes from new
efforts by professional societies. Evaluating continuous
medical education in the context of performance
improvement is a logical and essential element in the
cycle of learning. Changes occurring in the field of
continuous medical education demand new structures
that direct thinking about the role of learning in each
physician’s professional development.
Effective healthcare requires continuous learning.
According to Nancy Bennet and her collaborators
in an article in the journal Academic Medicine, the
principles to build continuous medical education can be
summarized as the following: act as a guide for physicians
to understand their own learning needs to recognize
opportunities and resources to match with needs to
enhance proficiency and promote lifelong learning
skills; study the role of continuous medical education
to enhance physicians’ knowledge, performance, and
healthcare results; design educational strategies based
on research findings about how physicians learn and
endorse changes in their professional conduction.
These strategies should include standard and dynamic
formats that incorporate new technical capabilities for
synchronous and asynchronous learning; collaborate
with other continuous medical education educators to
maximize the ability of continuous medical education
to satisfy the varied learning needs of physicians and
healthcare systems; and grant that healthcare outcomes
can be measured with clinical proficiency scales. For this
endeavor it is crucial to broadcast information about
healthcare innovation; and to increase the professional
development of continuous medical educators, including
their understanding and use of theory and research to
provide effective support for appropriate changes in
physicians’ knowledge, performance and healthcare
outcomes.
Much of medicine’s contract with society is based on the
integrity and appropriate use of scientific knowledge and
technology. Physicians have a duty to uphold scientific
standards, to promote research and to create new
knowledge and ensure its appropriate use. The profession
is responsible for the integrity of this knowledge, which
is based on scientific evidence and physician experience.
Sustaining knowledge and skills through continuous
medical education is a characteristic of medical
professionalism; therefore, it must be considered as a
right and duty of every graduate physician.
“The aim of continuing medical education is
to establish a link between health professionals and the fast-growing body of knowledge to gain the competences required for optimal clinical practice”
327
Q: What percentage of your operations does health
represent and what is your market share target?
A: Twenty-nine percent of Kronos’ business is within the
healthcare industry. Kronos’ development strategy is based
on stakeholder input, market trends and customer needs.
Stakeholders from the healthcare vertical with deep domain
knowledge participate in associations and communicate
with customers daily to listen to recommendations for
ongoing product improvements. By also monitoring
market trends, Kronos looks for innovations to drive
market leadership. Finally, our customers provide constant
input and direction by submitting ideas to Kronos and by
participating in various customer advisory boards.
Q: What potential does Kronos see for opportunities in
health in Mexico and what strategy will it use to capitalize
on them?
A: Kronos can help and add value in any process within
the continuum of care, whether they are health providers
or workers, clinical specialists or medical devices and life
sciences manufacturers. We are specialists in health and
life sciences organizations, so we add value to everything
and everyone that touches, or is around, patients. Our main
focus and most important objective is patient care.
Q: What added value can Kronos provide over other
companies?
A: Kronos workforce management solutions provide best-
in-class functionality, automation, ease of use and seamless
integration for any sized organization in every industry.
More than 30,000 organizations use Kronos worldwide
to maximize their workforce, maintain compliance and
improve employee engagement and productivity. In
addition, Kronos continues to invest approximately 10
percent of gross revenue in R&D. This funding provides us
with the ability to continue advancing our solutions and
provide our customers with the most innovative solution.
Q: What does Kronos look for when creating alliances and
what added value do these provide?
A: Kronos partners with managed applications services and
managed hosting-solutions providers to help organizations
ease the burden on their in-house IT departments. This
provides organizations all the benefits of a workforce
management solution without the challenges of planning
and implementing new technology.
Q: In which area is Kronos seeing the best return on
investment?
A: Kronos’ corporate strategy is focused on three core
principles: cultivating continual innovation, building and
sustaining our own engaged workforce and fostering a
customer-first approach in all that we do. By delivering
innovative workforce solutions, Kronos helps all types
of organizations strike that balance of individual and
organizational needs.
Q: What internal and external factors are boosting the
workforce management industry as a whole?
A: Three of the most significant trends driving Kronos’ market
are workforce solutions in the cloud. Deploying workforce
management and human capital management solutions in
the cloud provides a single source of data, simplifies software
delivery and helps organizations accelerate workforce goals.
Cloud solutions unburden IT staff to focus on core business
initiatives while the organization can be sure to leverage the
latest version of the Kronos solution.More than any other time
in history, organizations are faced with enormous challenges
regarding risk mitigation and compliance management due
to labor regulations. Keeping up-to-date on new requirements
and legislation is one part of the challenge, while accurately
tracking and maintaining compliance is the other. Kronos
provides solutions with workforce diversity in mind for
workers of all generations, regardless if they are contractors,
part-timers, hourly or salaried, telecommuters or field workers.
Our software is powerful, scalable and flexible enough to
handle complex pay rules while providing employee self-
service and collaboration features to empower the workforce.
IT SOLUTIONS FOR THE WORKFORCE
GABRIEL ALVARADOLATAM & Caribbean Vice President and General Manager of Kronos
VIEW FROM THE TOP
Kronos is a US-based company that offers workforce
management solutions for a variety of industries, including
distribution, manufacturing, entertainment, retail and media.
It is present in over 100 countries
328
HOW CAN THE PRIVATE SECTOR
PROMOTE A BETTER-EDUCATED
WORKFORCE?
EFRÉN CAMPOPresident and Executive Director of
Grupo Neolpharma
FRANCISCO MORALES Director of 3M Healthcare
NEIVI ORTIZ Director General of
Grupo Saned Latin America
ROUNDTABLE
Biotechnology and nanotechnology are two lines in which we are interested
in stimulating research. The prize (CINVESTAV’s prize for innovation in bio-
nanotechnology) was linked to pharmacology but it is now more open as it has
enabled the creation of new materials. The invitation to participate is open to
all the institutions and professionals working on those themes and the prize is
MX$300,000 (US$16,666). Half of the award is to reward the researcher and the
other half is to fund the continuity of the winning project. The purpose of the prize
is to create new talent, provide exposure and increase the diffusion of these kinds
of scientific proposals. We are approaching 2016’s winning researcher to ask for
his help capsulating some drugs we want to deliver to the limbic part of the brain.
We have well-established metrics. In hospitals, for example, we can measure infection
rates and their reduction. This is hard data that can corroborate our progress. The
same goes for hand hygiene. If people comply, infections are reduced. The same
applies to food safety because we can prove there are no pathogens or food viruses
on instruments. We signed an agreement with the foundation (Fundación Carlos
Slim) to participate and collaborate in education through the healthcare academy,
which is an umbrella for any kind of educational activity. We worked on this with
the foundation and IBM. Students are eager to learn about new practices and new
technologies and we struck an alliance with Del Valle Universty to provide these. Part
of the university’s responsibility is to show students not only the history of their field
but also what they will encounter on a daily basis in their practice.
Traditional education is unilateral and there is no debate between the receptor and
the educator. The education model is changing. We introduced simple and innovative
educating actions in which the teacher gives the students the main role in their
education and learning. This model is what we call Teach to Learn (T2L). We designed
our programs according to Dale’s Learning Cone, which says that 90 percent of what
we learn can be retained when we teach it. We also looked at Maslow’s Pyramid,
which shows that recognition is a main human need. We realize that people are
looking for a cooperative learning environment that can be delivered virtually and
for recognition of the content they produce. We also train doctors in affective and
effective doctor-patient communication and have a health sciences agreement with
Anáhuac University in which we develop content for programs.
Training and academic growth are fundamental to overcome
the current challenges in the health industry, as well as
enhancing the competitiveness of Mexico in the international
market. Collaborative initiatives between academia and the
public and private sectors, the application of technology
in learning and the integration of disciplines are some of
the trends that several companies are pursuing to achieve
better human capital. Mexico Health Review asked seven
leaders from manufacturing, consulting, law and marketing
companies working in the healthcare sector about their
contributions to improving Mexican health talent.
329
ALEXIS SERLINDirector General of Novartis
NELSON VALENZUELA LATAM and Caribbean Director of Arthrex
ALEJANDRO DE LA PARRA Director General of Astrum Salud
JAVIER CORTÉS Counsel at Jones Day
The role of the pharmaceutical industry should transform from being just a seller
to becoming a partner of the health system. We have different projects with
different institutions, such as one with IMSS on MS. In nutrition, the Center for
Diabetes Treatment (CAIPADI) has achieved 80 percent control of their diabetic
patients, while an average institution has 20 percent control. When an institution
applies a model and achieves outstanding results, we share that knowledge with
other institutions. For example, we send professionals from other institutions such
as PEMEX to spend time in the center to see how the model works and then we
help them apply the system in their institution.
In addition to our doctors educational center in Forida, we have one in Mexico
and one in Brazil because we have the obligation to correctly train doctors to use
our products. The courses are open to everyone, even those who do not use our
products. Some courses are available online through Arthrex’s webpage, which puts
over 4,000 videos online, and through our Surgeon’s Virtual App, which enables
doctors to first practice digitally before moving onto dry labs. In our labs, we use
imported cadaveric pieces from the US. Unfortunately, in Mexico the culture of organ
donation is poor and if we have chance to use a Mexican cadaver, the law is clear,
demanding the use of the full body. Can you imagine putting a full body on a table
just to practice on his knee?
We have formed solid commercial and academic alliances with various organizations
across the globe to offer better solutions to our users in health, education and
communication services. This has further improved our overall service quality
by giving it a globally competitive edge. Our alliance with the New York-based
organization Life Extension Advocacy Foundation has developed new and better
ways of providing educational and informative content in Spanish, closing the gap
for Spanish-speaking communities and enabling them to learn, engage and support
other prominent organizations in the life sciences industry. We emphasize that
education is a prime concern in improving healthcare in the modern world and it must
be addressed correspondingly to be offered in an accessible and effective manner.
We have established a coalition with the World Academy of Medical Sciences.
We are a firm of more than 2,500 lawyers in 44 locations worldwide, which
ensures a seamless communication across jurisdictions and shared experience and
knowledge with practice leaders and healthcare regulators across the world. We are
one team offering the same quality and client service standards. The lawyers also
receive continued education and we share knowledge among our offices based on
experience. We have access to the leader of each practice in case they want a peer
review or if they need to know how a similar situation is dealt with in other places.
Most other international firms have local offices and they are not coordinated. Several
of our global lawyers also have a degree in Life Sciences, providing comprehensive
support to our clients.
331As an attractive market that offers access to North, Central and South America,
the foreign interest in Mexico is sizeable. Many are making Mexico their strategic
center of Latin American operations and they are settling in the local market with
the help of consultancies. They face challenges such as the changes in COFEPRIS
regulation, the security environment and navigating the fragmented healthcare
system. But there are advantages to being located here. COFEPRIS is recognized
by an increasing number of Central and South American countries and exporting to
those countries is a tempting bonus. By manufacturing generic pharmaceuticals in
the country, companies gain a more advantageous position in government tenders.
Mexico has a diverse and growing population, a strategic location and numerous
trade agreements that make it ideal for doing business in the health sector. It
has become a destination for manufacturers and research facilities, which allow
legal advisers and consultants to become guides for foreign investors interested
in expanding in the area. This chapter is dedicated to those companies that are
opening the market to new opportunities and clearing the path for entrepreneurs.
It offers valuable insight into doing business in Mexico through interviews, analyses
and expert opinions on the healthcare industry.
DOING BUSINESS IN MEXICO
14
333
CHAPTER 14: DOING BUSINESS IN MEXICO
334 ANALYSIS: New Businesses, New Challenges
336 VIEW FROM THE TOP: Ignacio García-Téllez, KPMG
337 VIEW FROM THE TOP: Xavier Ordoñez, Deloitte
Horacio Peña, Deloitte
338 EXPERT OPINION: José Alarcón, PwC
340 VIEW FROM THE TOP: Ángel Ramírez, A3R
341 VIEW FROM THE TOP: Geraldine Rangel, Healthlinks
342 VIEW FROM THE TOP: Paul Doulton, Oriundo
344 VIEW FROM THE TOP: Carlos Rábago, Alliancesfa
345 VIEW FROM THE TOP: Christian López-Silva, Baker McKenzie
346 INSIGHT: Alejandro Luna, Olivares
347 VIEW FROM THE TOP: Ernesto Algaba, Hogan Lovells BSTL
Cecilia Stahlhut, Hogan Lovells BSTL
348 VIEW FROM THE TOP: Javier Cortés, Jones Day
349 VIEW FROM THE TOP: Rogelio de los Santos, Dalus Capital
350 VIEW FROM THE TOP: Eduardo García, Monterrey Ciudad de la Salud
351 VIEW FROM THE TOP: Mireya López, Pro Pharma Research
352 VIEW FROM THE TOP: Francisco Corpi, Elsevier
353 INSIGHT: Luisa Gutiérrez, Medisi
354 VIEW FROM THE TOP: Neivi Ortiz, Grupo Saned
355 ROUNDTABLE: How Open are Mexico’s Public and Private Health Sectors to Innovation?
334
NEW BUSINESSES, NEW CHALLENGES
Not only is the country a destination for manufacturing and
research, it is among the favorite destinations for foreign
investment. According to the World Bank’s GDP Ranking for
2016, Mexico is among the top 15 economies in the world.
The numbers speak for themselves: between 2009 and
2015, foreign investment in the pharmaceutical market alone
was just shy of US$3 billion, according to ProMéxico and,
based on INEGI’S data, there are 770 entities specialized
in the pharmaceutical sector, including 20 top international
pharmaceutical companies such as Merck, Pfizer, Janssen
and Novartis.
“The Mexican population is over 120 million and
its purchasing power is growing. We are also a
neighbor to the largest producer of medicines
and patent-holders in the world while the
medical devices manufacturing industry has
grown enormously and is located close to the border. Mexico
represents a great opportunity for foreign investment,” says
Javier Cortés, Counsel at the international law firm Jones Day.
The events of late 2016 and the first half of 2017, however,
have put investors on alert, with uncertainty coloring
decision-making processes in spite of Mexico’s well-known
advantages. The proximity of the next Mexican presidential
elections in 2018, a weaker peso and the economic policies
proposed by US President Donald Trump are all worrying
factors, says Geraldine Rangel, Director General of
Healthlinks, a Mexican strategic consulting firm dedicated
to helping foreign healthcare companies succeed in the
Mexican market.
Still, overall, the positive outweigh the negatives. Early in
2017, Bayer concluded its €40 million investment in the
construction of a corporate site in Mexico City. Novartis is
also executing a five-year US$50 million investment plan
targeting clinical research and it is working on the creation
in Mexico of a Center of Operations for Latin America, which
will host a team of 1,000 associates.
Mexico offers unmatched business opportunities in Latin
America, as demonstrated by the World Bank’s Ease of
Doing Business Ranking 2017. Mexico ranks 47th globally but
is ranked first in Latin America. The ranking compares the
regulatory environment for domestic firms in 190 countries
and develops a score for each based on indicators such as
ANALYSIS
0.9
1.0
1.1
1.2
1.3
1.4
1.5
2021202020192018 20172016201520142013
1.2621.298
1.143
1.0641.124
1.183
1.251
1.325
1.403
EVOLUTION OF MEXICO’S GDP (US$ trillion)
Sources: ProMéxico, INEGI, International Monetary Fund (estimated from 2017 onwards)
Source: Doing Business Report 2017, World Bank Group
EASE OF DOING BUSINESS RANKING IN THE AMERICAS
Country Global ranking Score
US 8 82
Canada 22 78.5
Mexico 47 72
Colombia 53 71
Peru 54 70
Chile 57 69.5
Costa Rica 62 68.5
Jamaica 67 67.5
Panama 70 66
Santa Lucia 86 63
A diverse and growing population, a strategic location and
numerous trade agreements with countries and regions
around the world have made Mexico the ideal place to do
business in the health sector
335
difficulty of starting a business, dealing with construction
permits, registering property, acquiring credit, protection
for minority investors, taxes, trading across borders and
labor market regulation.
The internationalization of COFEPRIS is another advantage
that has not gone unnoticed. The regulator is recognized
by eight Latin American countries, in addition to having an
agreement of homogenization with the US' FDA and with
Health Canada. “COFEPRIS, our regulatory agency, focuses
on providing registration protocols to make our country an
attractive destination for clinical research. The agency has
also simplified the registration process for new products
and continues to seal recognition agreements that make
Mexico even more attractive,” says Healthlinks’ Director
General, Geraldine Rangel. Its international recognition
also provides opportunities in the international market for
Mexican manufacturers, which usually export alkaloids, its
derivates and other products containing antibiotics.
COFEPRIS is also making several changes internally and
adopting new regulations such as the pharmacovigilance
norm to increase patient safety and to optimize its service.
Fortunately, the inclusion of authorized third parties has
facilitated processes and alleviated COFEPRIS’ workload.
Currently, there are 19 authorized third parties working in
the health sector. “The creation of the authorized third-party
system was a great decision. The government’s acceptance
that its internal structure could not deal with the volume
of demand was a good move,” says Carlos Pérez, Director
General of NYCE.
Business opportunities continue to arise in Mexico as the
country prepares to transition from being a manufacturing
site to an innovation center, as demonstrated by its 58th
place in the Global Innovation Index 2017. José Antonio
Meade, Minister of Finance and Public Credit, wrote in El
Economista in April 2017 that investment in research and
technology development rose to 0.60 percent in 2016 from
0.43 percent in 2012, a jump of almost 40 percent. The
Ministry offers a fiscal credit applicable to the company’s
income tax for 30 percent of its investment in technology
and research, he wrote.
Despite the market changes over the last years, the positive
incentives available in the Mexican healthcare market
should continue attracting business opportunities for local
and transnational companies, helping them achieve their
corporate goals and expanding the country’s growth.
MEXICAN EXPORTS IN THE PHARMACEUTICAL MARKET IN MILLION DOLLARS
1.0
1.5
2.0
1.75
1.25
2015 2014 20132012 20112010 2009
1.180
1.359
1.675
1.776
1.592
1.742
1.855
MEXICAN PHARMACEUTICAL EXPORTS (US$ billion)
Source: ProMéxico
Mexico is first among Latin American countries in the World Bank's Ease of Doing Business Ranking 2017
GLOBAL INNOVATION INDEX 2017
Country Global ranking LCN* Region Ranking
Chile 46 1
Costa Rica 53 2
Mexico 58 3
Panama 63 4
Colombia 65 5
Uruguay 68 6
Brazil 69 7
Peru 70 8
Argentina 76 9
Dominican Republic 79 10
Source: The Global Innovation Index 2017
* Latin America and the Caribbean
336
Q: What are the main tax issues that concern clients?
A: The OECD is pushing for tax systems to be more compatible
and comparable to avoid risks or mismanagement of financial
resources. That is the concern companies have: how to adapt
their financial statements to international standards. If, for
example, a bank lends money to a corporation but a local
office writes their statements using different accounting
practices, it will be difficult to consolidate. One of the
main reasons for international standards is consolidation,
comparability and transparency.
Q: Why is data analytics important in healthcare and how is
the information being used?
A: Data analytics is important because every hospital, network
and person is a source of information. Analytics is useful with
electronic medical records for tracking a patient’s condition,
for doctors to follow up on treatment schemes and for pharma
and medical devices companies to plan their production
and distribution in advance. It also plays a role in budgeting
because the health sector plans its budget based on historical
calculations but epidemiology behaves erratically. Although
controls are in place, it is difficult to predict how a disease will
develop in society or a given population.
Q: Which companies or sectors is KPMG most interested in
targeting?
A: The most important organizations are pharmaceutical
and medical devices companies, hospitals, pharmacies,
distributors and service integrators that buy inputs and sell
services to the healthcare sector, such as anesthesiology,
hemodynamics or interventionist procedures. Although some
believe they belong to the retail sector, their main focus is
medicines and products geared toward wellbeing and they
need a good distribution chain to allow affordable prices for
their clients. Thirty to 40 percent of visits to doctors in Mexico
occur in offices located in pharmacies, so those are becoming
important providers. Technology companies are not yet
focusing on this segment because it is still developing. They
are beginning with simple things, such as blood pressure and
weight measurement, while the world is innovating around
personalized medicine. We want to help take advantage of
global opportunities to address the needs of local patients.
Q: NAFTA is facing a renegotiation. What would be the
potential impact for the health industry?
A: The origin of components is one of the main areas that will
be impacted. We can take the example of the medical devices
cluster in Tijuana. They import inputs, manufacture a product,
send it as a semi-finished product to the US, where it is
packaged or undergoes a final process, and then is sold back
to Mexico as a final product. We may have to develop more
inputs internally, bringing more value to the manufacturing
process from as early as the R&D stage. This is something
the government has strongly focused on and in April 2017 a
new national consortium for innovation was established. This
is what places R&D on another level.
Q: How is KPMG advising clients in this respect, especially
makers of medical devices?
A: We advise them to diversify, to turn their focus to
Central and South America and to discover what the
needs of those markets are, as well as developing raw
materials. Those regions do not have a strong industrial
platform so there are opportunities for Mexico to enter
and meet the need for medical devices, medicine and for
hospital infrastructure because Mexico has a long tradition
of operating hospitals through PPPs.
The main challenges for companies entering these markets
will be to understand the market’s rules, especially as Latin
Americans are traditionally nationalistic. It is more difficult
for Mexican companies to enter Argentina and Brazil, but
there may be areas for building synergies. Companies need
to pinpoint the business style of their target countries and
figure out how to collaborate with them. The regional
respect and recognition of Mexican regulatory authorities
is something we should take advantage of. Most Central
and South American countries recognize COFEPRIS as a
relevant regulatory institution.
FARMING DATA FOR BETTER WELLBEINGIGNACIO GARCÍA-TÉLLEZDirector of Health of KPMG in Mexico
VIEW FROM THE TOP
KPMG is one of the world’s largest consulting firms,
specializing in audit, tax, advisory services and industry
insight across 21 industries, including healthcare and life
sciences
337
NEW RULES A CHALLENGE FOR
BOTH PRIVATE, PUBLIC
Q: What can Deloitte offer healthcare companies?
A: We offer help with regulatory compliance, like GMPs for
medical devices and materials, and we manage regulations
such as NOM-059 concerning drugs. We deal with topics
related to follow-ups for the use of drugs and medical device
types 1, 2 and 3. Medical supplies must meet the quality
regulations of each company.
Even though we manage this process, sometimes compliance
is not achieved because it is not just about meeting the
authorities’ requirements but also regulations. Mexicans
must have control of the drugs from their production to
their consumption. This control must be present both in
distribution and along the supply chain. There are many
biotechnological products in development, so the cold chain
is important and requires great care. In September 2016, NOM-
022 was published on pharmacovigilance. The law regulates
products commercialized in the country and the demands
for compliance are very different from the former law. This
represents a new challenge for the public and private health
sectors because active pharmacovigilance and tracking
systems are required, with metrics presented as proof of use.
Q: How can you help clients adopt this new regulation?
A: We can help them by checking their pharmacovigilance
programs and verifying how they work. We also advise on
communication with physicians because they are the first
ones to be notified about these kinds of issue when patients
tell them a drug made them ill. Unfortunately, patients in
Mexico do not notify the authorities about these issues, even
though it is the only way to know what is being done right
to make it better and what is done wrong to improve on it.
Q: How can companies deal with public sector budget cuts?
A: Considering there are growth opportunities in both the
private and the public sector, for many companies the latter
has been the main driver and with budget constraints there
are many questions about how to continue growing. There
are companies looking for and succeeding in finding growth
opportunities. Some are highly specialized and target their
investment to specific segments. There are also those
that target large medical audiences so their portfolio and
investments are consistent with their market intentions. Most
of these are national companies. Companies with top growth
levels have only one of these profiles. The companies we see
struggling are trying to do both simultaneously. During times
of constraint the real challenge is to have a clear strategy
without trying to accomplish everything, because that creates
inconsistency.
In Mexico, the public sector’s budget is large. It is concentrated
in IMSS and the different public institutions that require
medicine and it is distributed through tenders for which
providers must comply with bioequivalence, quality, good
manufacturing practices, exportation costs and other
requirements related to transparency, ethics and legal topics.
We expect an increasingly better supply of medicine, devices
and also services.
Q: How is innovation integrated into the Mexican healthcare
system and how open is the system to innovation?
A: Mexico needs to innovate more. We are in a different
Mexico. Before, we had family doctors, now we have
social security, Seguro Popular and medical consultancies
in pharmacies, so we must strengthen health services
through innovation and by guiding doctors, so they can
approach the population with quality drugs. Instead of
filling the market with generic products, we should provide
more innovative products.
At first glance, it could be said that Mexico does not
innovate as much as other countries, but we have seen
interesting cases of health-related innovations by Mexican
entrepreneurs. With regard to innovation brought by
transnational companies, perhaps more than openness
to innovation the issue is our speed in adopting it.
Remember, over 10 years ago our country was a preferred
territory for medical releases.
Horacio PeñaSenior Manager in Strategy and
Operations Consulting at Deloitte
Xavier OrdoñezPartner in Strategy and Operations Consulting at Deloitte
VIEW FROM THE TOP
Deloitte is one of the world’s leading audit, consulting,
tax, financial advisory and risk advisory brands, with about
245,000 people at member firms in 150 countries and
territories
338
EXPERT OPINION
A YEAR OF UNCERTAINTY AND OPPORTUNITYJOSÉ ALARCÓNLead Partner of Healthcare at PwC
Uncertainty and opportunity are the touchstones of 2017, in
which health services are shifting to value-based healthcare,
a move from which there is no return. This has been a trend
for a long time and has already consolidated in the US.
Mexico is a little behind but is getting there.
On the side of risk, we have new geopolitical dynamics,
but business and health go beyond this. PwC has identified
five megatrends: rapid urbanization, climate change
and resource scarcity, a shift in global economic power,
technological breakthroughs and demographic and social
change. These megatrends configure the reality we face
in a country where the middle class is the size of Peru’s
population and almost twice that of Chile. This class is
changing many views of the health sector and asking
for more value. The megatrends themselves overlap; for
example, putting together technological advances with
the lack of resources in the city are empowering ideas like
Uber, Airbnb or services that provide care at home. There
are also 2,500 private businesses practicing a new model
of integrating a doctor inside the company, a new market
that has been captured by companies like Previta. Also,
there are websites such as Curely and Doctorondemand on
which many Mexican doctors offer their services. This fusion
with technology and collaboration between sectors is what
we need to develop smart cities or, in the case of health,
clusters that gather clinics, academics and researchers.
There have been many initiatives for the development
of clusters in Mexico: Biometropolis, the health park in
Cuernavaca called Ayana and Tecnopolo. However, these
projects have been subject to political changes that put
them on standby.
When talking about the shift of healthcare to value,
there are three ways in which a company’s strategies are
oriented: strategies to adapt for value, to innovate for
value and build for value. PwC has compiled an executive
report on the top US health issues of 2017 and there are
six that translate to Mexico.
Patients are increasingly open to sharing their information
with the pharmaceutical industry on how they feel after
taking certain medicines. In Mexico, we need to personalize
pharmaceutical care through programs of patient
engagement for treatment adhesion. There are some
initiatives already operating such as Pfizer Conmigo (Pfizer
With Me) or Abrace a la Vida (Hug Life) from Abbott, which
must evolve to achieve their full potential. For example, PwC
EIGHT TECHNOLOGIES WITH GREAT POTENTIAL TO DISRUPT THE US HEALTH INDUSTRY OVER THE NEXT DECADE
Technology Areas of potential impact
Artificial inteligence (AI) Digitalized supply chain, efficient billing, accelerated R&D
Augmented reality (AR) Fitness and wellness gaming apps, guided tours of grocery aisles, surgical guidance
Blockchain Consumer identity management, fraud prevention, personal health data protection
Drones Digitalized supply chain, delivery of healthcare goods to consumers, emergency and disaster response
Internet of Things (IoT) Inventory control, care coordination, remote patient monitoring, digital supply chain, digitized operations
Robots Digital supply chain, remote patient monitoring and care, digital behavioral health services
Virtual reality (VR) Patient distraction, stress relief, medical school education tools consumer and clinician training, scenario planning
3D printing Customized implants, prosthetics and transplants, distributed supply chain, on-demand inventory
Source: PwC
339
has developed Bodylogical, a group of algorithms that,
when given information on a patient’s vital signs and
habits, will predict what the patient will suffer from within
a specific set of diseases.
There should be alliances between insurance companies,
pharmaceuticals, medical devices companies and patient
associations to create a model guaranteeing patients are
taken care of. In the future, we should see changes such as
COFEPRIS requesting that when registering a medicine,
pharma companies register a patient engagement
program too.
Another important aspect is the security of patient
information. There is a company in Mexico called SOHIN that
has developed a program to assist patients with cancer by
giving them advice and liaising with insurance companies.
This is the type of integrated model we need in Mexico.
An element to consider is the new force of innovation
devoted to detecting infectious diseases like H1N1 and zika.
The current test for zika takes two to three days to provide
a result, whereas a new test created by In Bios International,
currently undergoing registration with COFEPRIS, takes only
four hours.
There is also a wave of new medicines designed to counteract
antimicrobial resistance and others improving diagnosis.
In addition, the Ministry of Communications is sponsoring
a project called SINBA carried out by the Department of
Health Information (DGIS) of the Ministry of Health. It is a
platform that will help improve epidemiological surveillance
of the country and will eventually link all relevant information
from the day we are born. So far, SINBA has released an app
that locates the closest health center.
Many programs in Mexico focus on nutrition and wellness,
such as PrevenIMSS and PrevenISSSTE, and the National
System Against Obesity spends MX$80 billion (US$4.4
billion) every year. We have to continue working on
education because there are no short-term solutions. In
our survey in the US, consumers were asked from whom
they would be willing to take nutritional information and
79 percent chose their family doctor over their pharmacy,
gym, employer, grocery store and big box store. More follow-
ups after yearly checkups are needed and we should try
more popular models. The University of Texas launched an
experiment with hospitals in which community members
could subscribe to a nutrition program for free. First, they
were tested for diabetes or potential diabetes and then
were given a work-out plan and medicine if needed. This
could be implemented here. On the strategic sourcing side,
decision-makers from IMSS ask themselves if they should
buy from regional or national distributors in consolidated
PricewaterhouseCoopers (PwC) is a UK-based advisory, audit,
tax and financial services firm that aims to build trust in society
and solve important problems. With a global presence, it is one
of the biggest firms of its kind
2
2015
2014
2013
2012
2011
2010
200
920
08
200
720
06
4 6 8 10
purchases because there are four national players and
around 16 regional ones. The question is: why not integrate a
fifth player through national credits and in this way increase
competition? Another important topic is collaboration. The
best example in Mexico is the PPP model. However, the
situation is sad because many projects have been suspended,
such as Bahia de Banderas, Tabasco and Mazatlan. We need
from our authorities what we call the 4 Cs: communication,
collaboration, compassion and compromise. Politicians are
lacking compassion for citizens by blocking PPP projects,
while certain hospitals are overwhelmed by demand.
THE EVOLUTION OF PUBLIC AND PRIVATE EXPENDITURE PER CAPITA (US$ thousands)
Source: OECD
� Mexico
� United States
� France
� Turkey
Public spending
340
ideas, great talent and good sales strategies, but they
lack strategic planning. Many of the initiatives get lost or
into trouble because the entrepreneur forgot to establish
something as simple as a business model. There are simple
examples of mistaken decisions, like not including a salary
for the founder because he believes the idea must grow
first. Many entrepreneurs are not creating a thoughtful
plan and they are spending a lot of money and time
solving problems they could have prevented with better
organization. We try to provide all the necessary resources
because we believe that one should work for the best, but
be prepared for the worst.
Q: How can a Mexican consultancy like A3R help
international companies to expand here?
A: Our company can facilitate and make the start of
operations more efficient for foreign companies because
foreign business people are often concerned with why
some formalities are so complicated in Mexico. I try to
explain to them that Mexico has a huge money-laundering
problem and the authorities have put many security
measures and control mechanisms in place that do not
exist anywhere else. As a former government functionary,
I must recognize that the authorities often establish
a measure for a problem caused by 3 percent of the
companies and the remaining 97 percent are also affected
by those measures.
Q: What value do your clients receive by working with
a local and not an international firm?
A: Each of our clients is served by one of our partners. This
is our added value but we recognize that this limits us in a
way because there are only four of us and we cannot deal
with many clients at the same time. We do not go after big
companies because they have expertise and a complex
internal structure. Entrepreneurs place more trust in us and
give us the space to participate when they face new challenges
and opportunities. We are not interested in having a base of
200 clients. Instead, we have been growing by guaranteeing
our clients good service and a long-term relationship. That is
why we do not compete on prices. We compete on quality,
which is one of the hardest things to do in the service market.
Q: What is the profile of the healthcare companies you
work with?
A: They usually are distributors of pharmaceutical or
medical devices that sell to the government through tender
processes. We look for small-medium companies that
have around MX$50 million to MX$300 million (US$2.7
million to US$16.6 million) in sales annually. Preparing their
tender participation is a challenge for them because the
difficulty of the tenders is not in the technical and quality
requirements but in the correct submission of the documents
the government requires. We also like to work with creative
companies. However, companies with good ideas sometimes
lose a lot of money because the documentation they submit
is incorrect. That is why our expertise in preparing and
reviewing documents for purchase processes saves our
clients working hours and reassures them that the project
they are presenting is competitive.
Q: What changes have the tender processes produced
in the market?
A: The public Mexican health market is dominated by a few
companies. This is a result of the tender rules, which state that
only those who have already won a tender can participate in
the next auction, instead of allowing new players in that could
break the monopoly. However, if a medium-sized company
wants to provide a product but is not immediately capable
of supplying the massive amounts the government needs it
is completely left out of the auction. By breaking down the
volumes into more manageable sizes, competition would be
increased and the government could begin working with other
companies that may be able to further improve service.
Q: What are the main obstacles to success for healthcare
entrepreneurs in Mexico?
A: The main healthcare sector problem is that entrepreneurs
do not use the information available. They have great
OPENING OPPORTUNITIES FOR MEXICAN ENTREPRENEURSÁNGEL RAMÍREZDirector General of A3R
VIEW FROM THE TOP
A3R is a Mexican consultancy focused on corporate
negotiations, financing and administration. It helps companies
to restructure and optimize their operational, administrative
and technological strategies
341
in acquisitions will hire specialized investigators to avoid
purchasing businesses associated with money laundering.
Q: What regulation has the most impact on incoming
companies?
A: The elimination of a plant requirement had a huge impact
on incoming businesses. Also, the recognition of regulatory
agencies such as the FDA and Health Canada helped as
well. Finally, speeding up processes through authorized
third parties helped make regulatory procedures more
efficient and thus increased the attractiveness of Mexico as
an investment destination for health.
Q: Why has the clinical trial business failed to grow
significantly in Mexico, considering local opportunities?
A: In Latin America, Argentina hosts the most clinical studies
because Mexico never exploited its potential. But things
are changing. Even our Ministry of Economy recognizes
that clinical studies could attract the investors our country
needs. We have the centers, the patients and COFEPRIS
is simplifying procedures so I do not believe that other
countries offer more benefits. The problem is that Mexico
does not promote itself enough. Mexico is becoming an
appealing country for clinical research and we hope the next
administration will also work toward this objective.
Q: What are Healthlinks’ expansion plans?
A: Our plan is to boost the human capital in our regulatory
and medical marketing team, where we have also successfully
added new technologies to deliver our services. We will
encourage international expansion through workshops held
abroad on the Mexican market and its opportunities, and we
will also share our knowledge through webinars. Considering
the political and economic environments, we expect
companies to carefully evaluate their Mexican investment
potential and we will be there to guide them.
Q: What service does Healthlinks provide to companies
looking to do business here?
A: We offer a service called Pre-Start Up Program through
which we evaluate how well a company will perform in the
Mexican market. Healthlinks ensures the company complies
with regulatory requirements before starting operations
here and we study its product and predict its potential
success, providing the company with relevant information
to understand market dynamics and avoid the unnecessary
risk of potential failure. One goal is to provide managers
and staff a view of what they will face when they get to
Mexico. Seven out of 10 companies that come to Mexico fail
in their first years because no one helped them build the
right strategy. Our mission is to inform companies about
the challenges they will face and to help them succeed
from the beginning. Around 40 percent of our clients do
not have the complete documentation or decide to first
start operations through a distribution partner before
establishing their own subsidiary.
Q: How do foreign companies view the Mexican market and
its potential?
A: Mexico is seen as an attractive market with particular
and positive business conditions that are not easy to find
in Latin America or other countries in the world. One plus
is COFEPRIS, our regulatory agency, which is focused on
facilitating registration protocols to make our country an
attractive destination for clinical research. The agency has
also simplified the registration process for new products and
continues to strike recognition agreements that make our
country even more attractive. On the downside, potential
investors will face some uncertainty in 2017 and 2018 given
the Mexican elections, peso instability and the restlessness
caused by US economic policies that will have a direct
impact on our economy.
Q: How is security weighing on the investing decisions of
foreign companies?
A: Delinquency and corruption endanger Mexico’s popularity.
Many companies have been affected by robberies or have
faced bribery demands from drug traffickers, especially
manufacturing sites in Morelos. Some companies interested
LEARN THE LANDSCAPE BEFORE ARRIVAL
GERALDINE RANGELDirector General of Healthlinks
VIEW FROM THE TOP
Healthlinks is a Mexican strategic consulting firm dedicated to
helping foreign healthcare companies succeed in the Mexican
market. It focuses on medicine, cosmetics, food and nutritional
supplements and medical devices
342
Q: When looking at Mexico’s health sector, what impact
would a medical savings-plan model have?
A: Mexico has a similar structure for pension plans, so-called
AFOREs, in which there are individual savings accounts.
Applying that to the health system would pass the locus
of control to the patient to change his behavior. The plan
builds up savings that can be passed onto children, just
like a pension plan, which reinforces good behavior and
eliminates the perverse incentives that exist in the system.
IMSS and ISSSTE have the required technology in the
form of AFOREs, which would be applied to healthcare. A
single payer, which is what could happen with the Seguro
Popular, would be even easier. Behavioral change is the key
to reducing the colossal burden of obesity and diabetes,
the leading cause of disease and healthcare spending, so a
plan that engages the patient, guided by his family doctor,
and motivates a positive change of lifestyle habits would
be the most logical and affordable solution. There is no
better way to get better health for less spending. Medical
technology advances are a big help but lifestyle changes
show a better long-term ROI.
Q: To what extent would the unification of the various
health institutes be a necessary first step?
A: It would not be necessary because if the patient decides
on where best to spend his money, competition would
decide where he goes. This medical savings plan would
be a single fund managed by the patient who is advised
by his doctor. One of the biggest problems with the IMSS
and ISSSTE is that they are payers and providers, so the
money does not flow to the most efficient provider. There
is no bigger perverse incentive than the payer and provider
being the same.
Q: How viable is the prospect for change in Mexico’s
healthcare system?
A: Healthcare leaders say that the aging population, obesity
and diabetes are making it difficult for the public sector to
cover health costs. In Mexico, unlike European countries,
healthcare is not a vote-getter because it is low on the
political agenda. Hardly a single politician in Mexico will run
on a healthcare platform unless they are talking about free
Q: How does Oriundo operate and what advantages does
it provide?
A: Oriundo’s strength is its local knowledge, so we
recruited independent consultants and specialists in
their markets: Argentina, Chile, Colombia, Peru and Brazil.
We are all independent operators, which is a different
structure from other consultancies. Other firms offer
similar services in Mexico, but we are the only one that
covers Latin America. We have also been doing it for
much longer and some of our associates were previously
clients. Market entry strategies for new players into the
region have been our foremost activity.
Q: Which countries or regions will Oriundo reach out
to next?
A: We had someone working in Central America but that
position is currently open, so we should put someone
there. We believe that targeted search is the way
forward, helping our clients renew their portfolios. We
can access new and hard-to-find R&D and bring it to Latin
America. Through our associates in Europe, we learned
that the University of Barcelona had discovered a new
process that employed nanotechnology to overcome
problems related to skin and aging. The university has
a development laboratory but no commercial activity,
so we brought the technology to Mexico for a Mexican
partner and the technology is doing very well. In Madrid,
we discovered another therapy related to derma.
Q: To what extent are Mexican universities producing
possible opportunities?
A: We have been working on a big project for a
Mexican laboratory that is very small but has important
nanotechnology used to prevent nosocomial infections.
This has to be done on a global basis. There are patents
registered and the UK was the first to issue. However, this
is an exception. There is no reason why Mexican universities
should not be thinking along these lines. The universities
of Nottingham and Manchester, for example, have a person
or department devoted to building on this technology, on
how to capitalize on it. In fact, the people working on this
in the UK are mostly Mexican.
CHANGE BEHAVIOR TO BRING DOWN HEALTH SPENDPAUL DOULTONFounder & Managing Partner of Oriundo
VIEW FROM THE TOP
343
healthcare for everyone, a promise that would be difficult
to keep. What is different is the person of Mikel Arriola,
Director General of the IMSS, who is a great paradigm
buster. Alongside Minister Narro, he is probably the only
one that could bring about change.
Q: COFEPRIS is recognized outside Mexico. How much of
an advantage does this present?
A: This is a positive step. Mexico is ahead in terms of
recognition, not just by Latin America but also by the
WHO, the FDA, the EMA and others. Mexico is also the
only country in Latin America in which generics meet global
standards, giving it a huge competitive edge. Mexico is the
best beachhead for Latin America, from a technology and
regulatory standpoint and the harmonization of regulations
with other countries has been occurring slowly over the
past 30-40 years. Things take time because there are vested
interests but Mexico has the best regulatory environment
and it is recognized all down the Pacific Coast. Even
Argentina is considering recognizing COFEPRIS.
Q: Many Indian generics companies have entered Mexico.
What is the key to succeeding here?
A: India has been trying to enter the Latin American market
for a while, but it took about a decade to understand that
a price-cutting basis for competition does not work here.
To have a competitive advantage in the generics business,
you must be able to respond to rapid shifts in demand
and IMSS has decentralized buying. Indian companies have
changed their model and are entering the market with
differentiated products. Those that are making it here are
those developing supergenerics or that have products from
their own research. Outsiders, no matter their country of
origin, cannot enter the market on the basis of price alone.
Those with no local presence, no understanding of the local
market and no local production will not make it because
Mexico has generics that meet global standards.
Q: How are the Big Pharma companies competing with this
influx of high-quality generics?
A: Generally speaking, global players try to differentiate
on the basis of their R&D portfolio, competing for new
therapeutic areas and doing it better than others. One
thing to bear in mind is how the market dynamic has
been impacted by the supermarket and pharmacy chains.
The fastest growing sector in Mexico is the private-label
business, of which the largest manufacturer worldwide
is Perrigo. That, combined with the trend of having
doctors’ consultancies in pharmacies, so-called “doc-in-
a-box” programs, are the factors boosting the private-
label sector. Given these factors, companies must have
local operations to be able to negotiate and respond.
All this is very healthy and is bringing down the Mexican
wholesalers that dominated the market for so many years.
Oriundo is a consultancy composed of former CEOs that helps
new entrants to Latin American pharmaceutical markets. It has
four main business lines: market entry, portfolio rejuvenation,
acquisition and divestment and turnaround
The monopsony has been broken and the Mexican market
is becoming a much healthier market.
Q: What is your advice for clients that compete against
these private labels?
A: Most pharmaceutical manufacturers have moved this way
and those supplying to pharmacies have cut out wholesalers,
which is why prices are lower. Pharmaceutical manufacturers
that want doctors in pharmacies to prescribe their products
need to make sure they sell to that chain. Some will exclude
you and there are special distributors to help you get into
independent pharmacies. It means re-orientating the
business model, not implementing new technology. The
doc-in-a-box model is important to underline. It is generally
criticized but it has been a wonderful thing. In the past,
patients would go to a pharmacy and self-diagnose, buying
products that had worked in the past. Now, the patient can
go see a doctor for MX$30 (US$1.6) or even for free and
receive a diagnosis and the right medicine for that condition.
In the pharmacy chain next door, he buys the medicine.
These doctors in pharmacies, around 25,000 of them, have
been a great revolution. They are well-trained and they write
as many prescriptions as the IMSS does, which represents
savings for the public institutions. Previously, Mexico was an
unusual market in that it had products that had been on the
market for over 50 years, which patients bought because
they had done so in the past and did not want to pay for a
prescription. These old-faithful brands are on the decline.
Q: To what extent does this happen in other countries?
A: It is not unique to Mexico, although the country still
has the highest rate of out-of-pocket expenditure. India is
the only other country that sees such high rates. In Brazil,
there is now a large pharmacy chain that is emerging but
Argentina is much more fragmented. The major shifts in
Latin America have been on the basis of intermediaries.
“These doctors in pharmacies, around
25,000 of them, have been a great revolution. They are well-trained and they write as many prescriptions as the IMSS does, which represents savings for the public institutions”
344
visit. Our system eliminates the applications that are not
useful for a developing market and adds those that help
simplify the local model’s operation and make it faster. Our
integrated audit information and geolocation applications
enable a company to know where representatives are and
to keep track of who is working and who is not.
Q: How would you evaluate the current state of the Mexican
pharmaceutical market?
A: Every market is linked to the population. The Mexican
market is covered in terms of product necessity and
common diseases. However, there is an increase in the
number of players. Demand is also dispersed because
pharma companies sell similar products. We could generate
more savings and improve profitability through more
precise software and a better recruiting process. As a
country and as an industry we should recognize that digital
transformation is not optional, it is a requirement.
Q: What added value does Alliancesfa bring to the
pharmaceutical industry?
A: We provide customized solutions. We are inviting our
clients to integrate their sales force to the evaluation process
and, besides providing the software, we are involved in the
whole process. We act as consultants to orient our clients on
how to achieve better practices and policies for the medical
visit and we perform frequent updates to the system
based on client needs. Client requests are evaluated by a
committee and accepted changes are offered to all clients.
We are a trustworthy provider and we are committed to
working with those customers who resist change to make
sure they easily adapt to the CRM. We assure our clients
that we will help them reach their objectives.
Q: What are Alliancesfa’s growth expectations, both in the
short and long terms?
A: By 2018 we want to double the number of users we
administer today and by 2020 double that number again.
From 2020 onward, we want to grow in the sectors we are
integrating this year, veterinary care, medical devices and
oral health, and replicate the value we have provided to the
pharmaceutical industry.
Q: Alliancesfa offers sales force solutions for the
pharmaceutical industry. What are your main products?
A: We are focused exclusively on the pharmaceutical
industry in Mexico and Latin America. Our main product is
a Customer Relationship Manager (CRM) with and without
real-time geolocation but we also offer e-learning programs,
visual aids, business intelligence and data validation. We are
working on replicating in veterinary care, oral health and
medical devices what we have done in pharma.
Q: What benefits does CRM provide the Mexican and Latin
American pharmaceutical industry?
A: An adequate program will make operations more formal
and efficient. Companies should know the doctors who are
prescribing their products, where those doctors are located
and everything that must be considered in direct marketing. If
pharmaceutical companies know this, they can develop better
communication and management of their sales because a
company cannot control what it does not measure.
Q: How can Kangaroo, your CRM software, make a
difference for clients?
A: Kangaroo is the current generation of our software.
Its objective is to help companies advance in a faster
and simpler way. The product was developed in Mexico
and is updated along with Android and iOS and we are
also evaluating the possibility of making it available for
Windows. Kangaroo is operating version 2.5, but version
3.0 will be launched by the end of 2017. We apply the same
international standards as any other provider in terms of
data centers, development and management and we use
Structure Query Language (SQL) to manage our database
and Microsoft for software development. However, unlike
other software, our applications are specially designed for
Latin America. In Mexico, sales representatives are assigned
a territory or a route and a list of physicians they have to
CRM, THE STRATEGIC ALLY FOR MEASURING SUCCESSCARLOS RÁBAGOCEO of Alliancesfa
VIEW FROM THE TOP
Alliancesfa is a solutions provider for sales and marketing in
the pharmaceutical industry and niche companies. It provides
solutions such as customer relationship management for loyalty
programs and automatization of sales forces
345
The main lesson is that health regulation is not harmonized
at the international level, as every country has different rules.
There is not a body of international treaties on health law.
That is why the negotiation of certain international trade
treaties has attracted so much interest. First the Pacific
Alliance (PA) and then the Trans-Pacific Partnership (TPP)
pioneered an international law approach where health law
was incorporated into the disciplines of international trade
law. This represents a new avenue to pursue what is now
being called regulatory convergence and may constitute
the new way to approximate the regulatory frameworks of
different jurisdictions. Of course, this normative development
was impacted by certain decisions of geopolitical impact
such as the withdrawal of the US from the TPP. However, the
approach is likely to remain for future negotiations. It will also
depend on the success of the PA in this regard.
Q: What are the main legal challenges faced by foreign
companies looking to invest in health in Mexico?
A: One of the main challenges would be to navigate the
rules for holding regulatory approvals. This aspect varies for
different products and creates constant misunderstandings
among advisers not familiarized with health regulations. This
has a great impact on M&A transactions. The best practice is
to include in full the regulatory component within the scope
of the supported transaction, from the initial due diligence
process to the planning process and its implementation.
Q: What regulatory challenges will most impact the industry
in 2017/2018 and how?
A: Developments are expected in the areas of access to
public formularies, prescription-review mechanisms in public
institutions, transparency on interactions with healthcare
professionals, digital, personalized medicine and biotech
products. At the same time, we have seen increased oversight
of the industry from the tax and antitrust authorities.
Q: How is Baker McKenzie helping clients overcome new
challenges in the Mexican market?
Being a global law firm enables us to quickly identify major
industry trends, giving us the opportunity to dedicate
resources to create quite early high-value projects, such as
our digital health initiative, where we integrate key areas
of legal service such as health regulation, information
technology and privacy law.
We have also embraced technology and have developed
useful mobile apps for our clients, such as our Global
Healthcare MapApp and our Global Antitrust Dawn Raid
App. The MapApp is a mobile application that provides
access to real-time information on the laws and regulations
impacting the healthcare industry in more than 40 countries.
MapApp also provides users with the contact details of
Baker McKenzie’s healthcare specialists, which makes it an
invaluable tool for healthcare companies that need quick
access to information. Dawn Raid provides clients across
44 countries that are experiencing a raid with real-time
step-by-step guidance on their rights and obligations, as
well as instant access to Baker McKenzie’s antitrust lawyers.
The app is a cutting-edge platform that provides practical
assistance and peace of mind for individuals on the ground
handling unannounced inspections. It answers a range of
practical questions on a country by country basis under
local law. The Antitrust Commission in Mexico has increased
its activities and oversight of the healthcare markets with
several ongoing investigations and the adoption of the first
criminal action in the country.
Q: Many regulatory agencies speak of homogenization of
Mexican law and regulations with US and EU laws. To what
extent is this possible?
A: We have a lot of experience comparing different regulatory
frameworks. For instance, we were commissioned to conduct
a broad study comparing the health regulation for medicines
in the EU and in Mexico. This was funded by the European
Commission and formally delivered to COFEPRIS. However, on
a regular basis we also prepare webinars comparing regulation
in different jurisdictions using our experts from different
regions and multijurisdictional surveys on specific topics.
GLOBAL VIEW, DIGITAL RESOURCES FOR NEW
CHALLENGESCHRISTIAN LÓPEZ-SILVA
Partner and Head of Healthcare & Life Sciences at Baker McKenzie
VIEW FROM THE TOP
Baker McKenzie is a global law firm operating in automotive,
consumer goods & retail, energy, mining & infrastructure,
financial institutions, healthcare, tourism, private equity, real
estate and technology and media & communications
346
INSIGHT
PROGRESS STILL TO BE MADE IN DATA PACKAGE EXCLUSIVITYALEJANDRO LUNAPartner and Life Sciences Co-Chair at Olivares
Intellectual property is preciously guarded in all sectors
and countries due to its high intangible value and as a
result, patent litigation is prevalent. According to PwC,
four of the 10 largest initial adjudicated damages awards
globally between 1996 and 2015 were in the health sector.
NAFTA partners the US and Canada have beefed up their
regulations and law firm Olivares says Mexico also needs
to step up when it comes to data package exclusivity.
Olivares, a Mexico-based leader in intellectual property law,
presented evidence to the regulating authorities for data
package exclusivity to be changed, namely to mirror the
rulings in other NAFTA countries. Whereas in the US and
in Canada certain pharmaceutical products are protected
for five years and new formulations and new indications
are protected for three years, biologics and orphan drugs
are granted 12 years of protection. “In Mexico, there is only
an incipient and weak protection for five years, granted
through an internal COFEPRIS paper that would have
difficulty standing up in a court of law. Data package
exclusivity terms remain at five years for biologics and
orphan drugs. This is not satisfactory,” says Alejandro Luna,
Partner and Life Sciences Co-Chair at Olivares.
The firm has presented evidence to the regulating authorities
showing that these drugs require over 12 years of R&D and
therefore should be granted longer exclusivity periods.
“Most patent litigations occur in pharma because of the
rise of generics. This began around 20 years ago and
there is little case law to rely on because most cases were
either settled or are still ongoing,” explains Luna, who is
negotiating on behalf of AMIIF in international free trade
agreements. He is lobbying for a change in Mexican law
in data package exclusivity and in patentability. He was
previously negotiating for the TPP, and should NAFTA
renegotiations go ahead, would look to represent the
pharmaceutical industry.
In 2003, linkage regulations came into effect in Mexico to
avoid these disputes. “The Mexican Institute of Industrial
Property (IMPI) publishes patent registrations in its journal,
which COFEPRIS checks before registering a new patent
to ensure one does not already exist. In addition, the
registrant must swear under oath that to their knowledge
there is no other existing patent. Before this regulation
came into effect, there were 20 compound molecules
under litigation. Now, there are none,” says Luna,
adding that new formulations are the most commonly
disputed. “The easiest way to fight an unlawful marketing
authorization is to have it nullified, rather than filing an
infringement lawsuit before IMPI, which can take years
to reach a decision. By having a patent published in the
linkage regulation it should prevent or nullify marketing
authorizations in violation of patents.”
Counterfeiting is often seen as a major problem in pharma.
According to the US-based Pharmaceutical Security
Institute, in 2015, there were 3,002 incidences globally
of counterfeit medicine involving 1,095 pharmaceutical
products. In Mexico, El Universal reports that between
Jan. 1, 2007 and Dec. 31, 2015 the Attorney General’s
Office seized 945,152 fake medicines, just under 942,000
of which were confiscated in Mexico City. The Attorney
General has been granted stronger powers in Mexico
to pursue action against counterfeits without the prior
authorization of the title holder, yet Luna believes that
the most efficient course of action to reign in counterfeit
medicine in Mexico would be to confiscate them at the
borders. “Under current law, products cannot be seized
because they are considered in transit between countries.
If this is changed, it would be much more difficult for
counterfeit products to make their way into the Mexican
market,” he adds.
To protect against counterfeiting, filing a patent is a
necessary step. However, many are unaware of intellectual
property procedures in life sciences, including in the highly
patented pharma sector. Luna says this happens most
often with researchers and universities. “Because they
are often required to publish papers, they do so without
knowing the intellectual property ramifications. Once
a paper is published, the knowledge it contains can no
longer be protected by IP law, which many are unaware of.”
347
TPP TO AFFECT IP REGULATION
Q: To what extent have regulations been homogenized
with those of the FDA or EMA?
EA: Mexico has become an attractive investment
destination for the pharmaceutical and health industry.
Several factors have contributed to this interest in our
country, including the successful harmonization and
cooperation of COFEPRIS with other leading health
agencies, such as the FDA. In 2011, the Ministry of Health
implemented through COFEPRIS a special program
known as the Agreement for the Promotion of Innovation,
intended to expand the availability of innovative medicines
to Mexican patients and strengthen the competitiveness
of the market. Furthermore, it aimed to permit recognition
of drug authorizations issued by other agencies for
the marketing of new molecules. As a result of the
implementation of the program, COFEPRIS has signed
agreements with regulatory agencies from Australia,
the US, Canada, the EU and Switzerland. Through these
agreements, COFEPRIS can recognize and validate
marketing authorizations of health inputs that are not
yet marketed in Mexico and that have been issued in the
partner countries, recognize GMP certificates of other
countries and work with other agencies to evaluate new
products before authorization is granted.
Q: What regulatory challenges do incoming foreign
companies face?
EA: The main challenge facing companies is legal certainty
that the government and the regulatory pathway provides
guarantees and ensures certainty with respect to their
submissions and assurance that authorizations are secure.
CS: They must also be reassured regarding time frames
and requirements because there are many permits and
authorizations needed. We need to be more focused on
compliance with regulation rather than with paperwork
and filings. Also, an important challenge is the difficulty
of placing the new high-tech and innovative products
within the regulatory framework. Our regulation is many
steps behind new technology, which has resulted in
certain companies and products facing adversity when
complying with requirements.
EA: Companies are challenging and requesting that their
patent rights are properly guaranteed by the law during
the timeframes granted. On one side of the coin are the
rights and warranties needed while on the flip side, those
are precisely the challenges companies will face and
they will request their rights and warranties are properly
respected. A common desire is that the linkage system
between COFEPRIS and the Mexican patent office turns
into an efficient tool, providing the proper security for the
exclusivity rights encompassing patent rights and product
marketing authorizations.
Q: What will be the biggest regulatory issues in the
next five years?
CS: Regulations improving biotechnology and high-tech
and innovative products will be an issue. I would expect
improvements to the legal framework for high technology
in medical devices, which is difficult as the sector develops
quickly. Personalized medicine is an important issue we will
also see over the next few years. I think the cosmetic sector
will see changes given rapid technological advances
EA: Equivalence agreements and recognition of foreign
product authorizations for faster pathways will provide the
Mexican population with more alternatives. There should be
homogenization through amendments to legal provisions,
following the global trend of expanding markets. Product
innovation will be a driver for regulatory change to ensure
they are safe and efficient. Also important is the potential
implementation of the TPP in Mexico, assuming that this
treaty enters into force. The TPP proposes at least 10
years of protection from the date of marketing approval
for undisclosed tests and other data concerning the safety
and efficacy of chemical agricultural products. Biologics are
granted an eight-year term of protection from the date of
first marketing approval.
Cecilia StahlhutSenior Associate of the Life Sciences
Practice at Hogan Lovells BSTL
Ernesto Algaba Partner of the Life Sciences Practice at Hogan Lovells BSTL
VIEW FROM THE TOP
Hogan Lovells BSTL is the Mexican branch of the international
law firm present in 25 countries with over 2,500 lawyers. It
operates in areas as diverse as aerospace, energy, finance,
infrastructure, life sciences and real estate
348
Q: Despite these issues, foreign companies still want to come
to Mexico. What is driving international investment?
A: The Mexican population is over 120 million and its
purchasing power is growing. We are also a neighbor to
the largest producer of medicines and patent-holders in
the world while the medical devices manufacturing industry
has grown enormously and is located close to the border.
Therefore, Mexico represents a great opportunity for foreign
investment. During these times of uncertainty, it helps that
we are a global firm with a large presence in the US and we
have broad knowledge of its commercial regulations. We can
provide our clients with up-to-date information and we also
accompany them through the regulatory changes and the
industry’s evolution.
Q: What opportunities does homogenization between the
FDA and COFEPRIS bring to the industry?
A: These homogenization opportunities became possible
through an agreement signed in October 2012 that allowed
faster healthcare registration of American products.
COFEPRIS has replicated this procedure with Health Canada
and through other agreements with South American
countries, which makes the process faster for medicine
and medical devices. Authorized third parties are not
included in this process for medical devices. The inclusion
of these institutions is positive, but there should be room for
accommodating more institutions, otherwise it becomes a
monopoly. They should standardize requirements and there
should be more players.
Q: What is the added value Jones Day offers that similar
firms in Mexico cannot?
A: We have over 2,500 lawyers in 44 locations worldwide.
We have great depth in the US and our clients are some
of the largest laboratories in the world. We are truly one
firm worldwide, which ensures a seamless communication
across jurisdictions and shared experience and knowledge
with practice leaders and healthcare regulators across the
world. The lawyers also receive continued education and
we share knowledge and experiences among our offices.
Most international firms have local offices and they are
not coordinated.
Q: What main issues has Jones Day noted in the Mexican
healthcare industry?
A: It is important to consider that modifications to sanitary
registrations require the consent of the rights holder. It is
common for Mexican distributors to become the owners
of such registrations, which on a day-to-day basis protects
them from contract infringements. This makes it difficult for
international manufacturers or sellers to claim their rights in
a dispute and thus the Mexican holder of the registration that
breached its commercial responsibilities has a clear advantage
in any possible conflict. Therefore, foreign companies must
think carefully about how to structure a contract before
coming to an agreement with a Mexican distributor.
A matter for concern is that Mexican legislation lacks
a clear mechanism for approaching the authorities
about how to resolve doubts on the interpretation of
regulations. If sanitary regulations established certain
steps to approach the authorities in good faith in such
cases, this would in all likelihood lead to an opportunity
to improve the relations between authorities and
manufacturers or distributors of healthcare products and
to improve the authorities’ surveillance.
Q: What does COFEPRIS need to do to improve this situation?
A: In general, there are many discrepancies in the
application of regulations. We also believe that better
access should be provided to communicate with
the decision-making authorities. Additionally, the
pharmacopeia is not yet published in the Official Journal
of the Federation, despite it being the official support of
COFEPRIS’ actions for medicine approval procedures. We
believe that there are procedures not included in the law.
For example, there is no clear regulation on advertising
alcoholic beverages in certain places or on advertising
tobacco in duty-free shops for certain events.
SMOOTHING THE IMPORT PROCESSJAVIER CORTÉSCounsel at Jones Day
VIEW FROM THE TOP
Jones Day is a global US law firm with offices in 44 countries.
Its practices include capital markets, global regulation,
antitrust, energy and healthcare, among others. It has been in
Mexico since 2009
349
this is an insurance scheme for corporate clients. Around
10 percent of the 1,000 opportunities we receive every year
are in the health sector. However, to get into the health
space, startups require more knowledge, a better network
and understanding of the ecosystem.
Q: What is the standard process companies go through to
receive financing from Dalus Capital?
A: They approach us and show us why they are different,
why they have innovation behind them and why a customer
would prefer to use their solution, product or service over
existing ones. We evaluate the efficient scalability of
their business model, which is a key constraint. We also
try to determine if the problem they treat can be solved
differently. In the early stages, we can help them configure
the best approach to monetize that opportunity. After they
pitch, if we like what we see then we decide on terms and
conditions and perform due diligence. Lastly, we draw up
an exclusion plan to mitigate the risks the venture faces and
present it to the investment committee. On average we ask
for 20-25 percent equity.
Q: What are your expectations for 2017?
A: Planning for a year is too short. If we do not solve chronic
diseases, they will have a huge toll on people’s quality of
life and on the finances of the country. They have a huge
impact on social security costs because there is no budget
that can withstand those problems. We are only delaying
and not taking care of the problem as it is evolving. I
expect the healthcare system to be more transparent, the
incentives should be aligned with increasing quality of life at
a lower cost, which is a big problem. Many solutions are not
simply having more beds and doctors. We need to deploy
technologies that can scale and can change this dichotomy
and the dynamics of this industry. Watch out for AI and the
cloud because they will shape this industry.
Q: What kinds of health startups are emerging in Mexico?
A: Mexico has enormous and untapped potential in many
aspects, from medical devices to therapeutics. We see ever-
more sophisticated groups with relevant papers published
in prestigious journals and I recently met with a financial
group that created a startup for psychiatric treatments
with a Big Data approach. Most things being cooked up
are geared toward creating disruption in the health system
but many are expensive, do not solve the root cause and
drain more and more resources because people get sick.
These groups are doctors or professionals tired of being on
the other side of the equation and who are trying to provide
solutions through technology to keep bigger communities
healthy and avoid people reaching the treatment phase. We
are an innovation-based fund but we do not plan to invest
in taking a therapeutic through phases I-III. We consider
how to deploy technology based on apps and Big Data to
serve communities.
Q: What steps into the health startup industry have you
made so far?
A: We have not made any investments yet but we have one
in progress. The first investment that we wanted to close
with fund one, a US$70 million fund, was an app from a
doctor based in Mexico City. He has been published in five
or six top journals worldwide and had a solution for HPV
diagnostics and a therapeutic solution for infection in both
women and men. I was told that although the publications
were great and the cases treated were real and verified,
the team behind the app lacked the rigor and scientific
approach to scale the project worldwide. Also, we have
just met with a US company that has developed a solution
applicable to the Mexican and Latin American markets to
automate the diagnosis of cervical cancer through pap
smears. Another company from Monterrey is working
on a solution for diabetes by diagnosing symptoms in
the eyes, feet and skin. It is establishing small outlets in
heavy traffic areas and offers eye examinations. Now, it
is working with corporations to lower insurance costs by
installing technology on employee phones to track health
habits and subtly influence them. The company promises
to reduce insurance costs by up to 50 percent. In truth,
LONG WAY TO GO FOR HEALTH STARTUPS
ROGELIO DE LOS SANTOSDirector General of Dalus Capital
VIEW FROM THE TOP
Dalus Capital is an early stage and growth equity fund founded
in 2015 and based in Monterrey and Mexico City. It is focused
on supporting Mexican and Latin American entrepreneurs and
works in a diverse range of sectors, including health
350
prevention, minimal correction and highly sophisticated
procedures. In addition, the private sector has focused on
and strived to complement the public system, from macro
to micro providers.
Secondly, is the development of medical tourism. It
is already happening but there are no overarching
statistics we can rely on. Although there is still some
suspicion of the industry, which is dissipating, medical
tourism is increasing thanks in part to the city’s favorable
environment. In 2016, medical tourism was strongly
reflected in national tourism figures.
A third achievement is that the value chains in this offering
have also integrated other sectors through the tourism
cluster, such as the hotel industry, the light vehicle sector
and aviation. Inter-cluster work has been beneficial in this
sense and together we have developed plans to improve
integrated services. This concept has strengthened
medical tourism. I see an emerging line in digital services
and distance care, which is something we could explore
in the future.
Q: What are the cluster’s ambitions for 2017 and how will
it achieve them?
A: In 2017, our goal is to strengthen medical tourism and the
perception and positioning of Monterrey as a destination, in
addition to forming a strategy of networks. We can support
other clusters across the country and we can cover the
demand they cannot satisfy because we are only two hours
by air from the furthest cities in Mexico.
Q: How is the cluster working with the government to
promote medical tourism?
A: We have a- close relationship with the Ministry of
Economy and Labor and the Ministry of Health. Medical
tourism is a priority for the government, for the economic
incentive it represents for the state and for the possibility
of offering care to more people. We have received support
through various ministries to develop activities that
promote the city, to offer high-quality services and to
facilitate processes and paperwork.
Q: What advantages does this cluster provide for its
member hospitals?
A: The cluster has many advantages because it does not
only focus on generating added economic value but also on
developing the industrial sector and attracting investment.
There are important elements that are being addressed, such
as nursing, patient security, clinical research and quality of
researchers. We are also working on a diploma in research
for the members of the cluster.In terms of security, we run
simulations of potential accidents in hospitals, in which
all hospitals cooperate. The doctors and nurses from the
“affected” hospital provide feedback on the reaction of
the other hospitals to the emergency. The cluster also has
marketing committees focused on attracting health tourism
to Monterrey. Monterrey Ciudad de la Salud is an open
organization so we are looking for new members. The main
criteria for admission is quality.
Q: How are you working with universities to ensure that
graduates have the skills required of them?
A: First, universities are part of the tourism cluster and include
relevant themes in their programs. Second, we are seeing a
phenomenon of small details in the health sector such as
making English a requirement for graduation. Practice is vital,
as a bilingual person can easily lose words that are not used.
Much of the student population gains experience in dealing
with the conditions most relevant to Mexico, such as NCDs.
Epidemiology classes also take into account that people
can now die of infections that previously did not exist in a
particular region. Zika is one of the clearest examples of how
movement patterns have shifted and impact a community.
Q: What have been the cluster’s three most important
achievements over the past 10 years?
A: The most important achievement is that we have formed
an integrated offer of health services on several levels:
WORKING TOGETHER TO OVERCOME DIFFICULTIESEDUARDO GARCÍAPresident of Monterrey Ciudad de la Salud
VIEW FROM THE TOP
Monterrey Ciudad de la Salud, created in 2011, is the first health
cluster of its kind in Mexico. Based in Monterrey, it brings together
public and private hospitals with government officials and aims to
promote health and medical tourism
351
products that can be new molecules or new combinations
for which there is not yet ample evidence to demonstrate
their safety in Mexico. With no exceptions, Class 3 products
should undergo a pharmacovigilance study even though
they represent only between 10 and 20 percent of drugs.
Q: What main issues do your customers face? How do you
help to solve them?
A: Most companies face problems in drafting protocols
and risk-management plans or adapting them to local
regulations for pharmacovigilance studies, so they need help
in drafting and adapting them through their global offices.
We also run the outsourcing of pharmacovigilance units for
those companies that prefer to have a lean organizational
structure in Mexico and focus on their core activities. The
execution of post-authorization safety studies is one area in
which companies need help from an established player like
us. We are creating a document-management system for
COFEPRIS and the industry so they have a digital system
to facilitate renewals of all the sanitary authorizations that
contain references to pharmacovigilance requirements.
Q: What will be your main priorities for the rest of 2017?
A: We hope to bring all pharmaceutical industry players
into the PPROVigi network. We have already brought
IMSS on board and we are working with the Coordinating
Commission of the National Institutes of Health. The
School of Medicine at UNAM already has working
arrangements with us. Later, we will turn to the remaining
institutes such as ISSSTE, PEMEX and a couple of big
hospitals from each state to have uniform representation
of side-effects across Mexico. It usually takes two to eight
months to bring any institute on board after complying
with their processes. We want to reach a 50/50 business
split between Mexico and Latin America because we want
to be in touch with other national regulators.
Q: What is the PPROVigi platform, its target market and
the benefits for users?
A: G8 countries have integrated healthcare systems in
which even paramedics can send pharmacovigilance
reports. This is not the case in Mexico, so we wanted
to develop a system that the regulator, constituents of
the healthcare system and research institutes could all
use. Patients and healthcare professionals can access it
using cellphones and pharmaceutical companies and big
hospitals can use the web version to capture information,
verify quality control, check the MedDRA code, an
international medical terminology dictionary, and submit
reports to COFEPRIS online. The platform is available to
all hospitals and research institutes free of charge or at
subsidized cost. Pharmaceutical companies and other
marketing authorization holders should subscribe to this
platform to perform their pharmacovigilance operations.
Principally, pharmaceutical laboratories are attracted to this
platform because it adds many functional efficiencies to
their pharmacovigilance operations, due to the network of
hospitals also using the platform.
Q: The 2012 NOM-220-SSA1 is on your website. When will
you start helping clients to comply with the 2015 version?
A: Once the new version of NOM-220-SSA1-2012 is
published in the Federal Official Journal, we will update
the website. We have a ready reckoner waiting to go to
print that contains a synopsis of the law and all applicable
instances to Latin American countries. As soon as it is
made official, we will print the book and distribute it to
all our clients. Many companies in Mexico have their Latin
America head offices here and we want to give them a
single snapshot of the region. Some of the biggest changes
are in the frequency of reporting, the content of each report
and the requirement of risk-management plans. Previously,
the risk management plans had no categories. The changes
to the NOM will introduce three classes. Class 1 is for
generics or time-tested drugs with a low or well-established
risk profile that makes for an easy renewal process. Class
2 is a little more complex, containing medicinal products
with uncertain risk or with evidence of safety concerns
while Class 3 is composed of newly approved medicinal
DIGITALIZING PHARMACOVIGILANCE
MIREYA LÓPEZOperational Director of Pro Pharma Research
VIEW FROM THE TOP
Pro Pharma Research is a Mexican company created in 2012. It
has evolved into a one-stop shop for pharmacovigilance over
the past six years and it is looking to facilitate the process
industrywide with its digital platform in Mexico and LATAM
352
Elsevier is a global information analytics company that
helps institutions and professionals develop scientific health
projects. It is traditionally known as the leading editorial of
scientific literature
Q: What solutions has Elsevier introduced to the Mexican
scientific community? What are its main products?
A: We apply 140-plus years’ experience in simplifying and
organizing life sciences information to ensure discoverability
and accessibility of vital information. Elsevier’s solutions
include Embase, which provides high-quality biomedical
information with a level of comprehensiveness not seen
anywhere else. It is recommended and trusted by the
Cochrane Collaboration, international regulatory agencies
and thousands of users across the pharmaceutical and
medical devices industry. Even with the technological
advances in genomics, only about 5 percent of drug
candidates make it to market. Up to 30 percent of those that
fail are due to inadequate or inaccurate target validation
resulting in a lack of efficacy or unanticipated off-target
effects, often leading to unforeseen serious adverse events.
We offer a solution to mitigate this problem through our
tool Pathway Studio. Providing global content from patents
and 16,000 scientific journals, Elsevier’s Reaxys solution is
designed to support the full range of chemistry research,
including safety and toxicity analysis and method of
analysis as well.
Q: What are the main research trends you have recognized
in the pharmaceutical industry?
A: Big Pharma companies have demonstrated their interest
in the available patient pool, which offers a substantial
opportunity to accelerate their research. This has been
considered a key factor for bringing clinical research to the
country, although there is a concern from regulatory agencies
and policymakers regarding the safety of patients. While both
Big Pharma corporations and policymakers here in Mexico are
still figuring out the most adequate formula of success, we see
many clinical trial opportunities lost to other countries in the
region. The challenge is not just the bureaucracy of policy but
it is even at the infrastructure, personnel and information level.
There are so many generic molecules approved globally,
but only handfuls make it into Mexican markets. Although
already established as generic molecules globally, these
advanced molecules are often considered “New Molecules”
for registration purposes in Mexico. Also, we have seen bigger
national companies take the lead in other areas of research,
especially in identifying key generics for local manufacturing.
The growing cost of APIs has always been a concern for local
national pharmaceutical companies and on the other side the
limited research output in terms of publications and patents
is a concern for academic universities.
From an intellectual property standpoint of research,
there are not many patents emerging, especially from the
pharmaceutical sector. According to IMPI, local Mexican
companies, government and academic institutes own an
estimated 600 patents. This is approximately 2.5 times
fewer than Brazil and approximately 100 times fewer than
South Korea.
Q: How can Elsevier’s tools help boost productivity within
Mexico’s healthcare services?
A: For any country in the current macroeconomic context
there are three fundamental performance indicators for
innovation and productivity: quality research output,
intellectual property and application and socio-economic
output. Elsevier has designed services and tools to improve
and impact all three areas.
We have the privilege of working closely with almost 100
percent of international big corporations in the industry that
clearly have adapted to the shift in the industry with respect to
qualified information and analytics for their decision-making
process from research to the commercial end. We also have
witnessed how access to information has enabled global
generics companies to evaluate and rationalize their portfolio
and to strategically move away from their overdependence
on top cash-cow molecules over of period of time. This
shift is happening slowly but surely at top local Mexican
pharmaceuticals. We are working closely with them to
introduce and educate them on the current reliable resources
through different programs and customized workshops.
PROVIDING RESOURCES TO IMPROVE MEXICO’S SCIENTIFIC PRODUCTIONFRANCISCO CORPILatin North Regional Director of Elsevier
VIEW FROM THE TOP
353
INSIGHT
works here. If someone has the flu, it is easier to go to
a pharmacy and get something prescribed than to go
to IMSS or ISSSTE and waste a whole day waiting for an
appointment.”
Gutiérrez explains that this same backlog causes regulatory
problems. The certification processes for medical devices
challenges international companies. According to Gutierrez,
in 2015 the system suffered severe setbacks in the wake
of changes to COFEPRIS’ direction. “It is too soon to tell
if the new people in charge are delivering results but I
believe the people in power have a strong impact on the
process. Once they change, we once again will have to
go through new criteria with different requirements for
evaluations.” Gutiérrez contends that “it is good to be more
demanding but not when demanding standards based on
new manufacturing criteria that have higher requirements
than those in Europe and the US.”
Despite the challenges, many companies see the market
opportunities that Mexico offers. “I always tell my clients
there is no bad business here because even if their market
share drops, it will still be a stronger market share than in
most of the other countries they sell in.”
Foreign companies can also benefit from the manufacturing
possibilities in Mexico. According to INEGI, there are 2,000
units of production equipment and 400 exporters, most of
which are focused on manufacturing. The country’s sound
reputation has helped attract medical devices companies
and about 60 manufacturing sites to Baja California,
according to ProMéxico, which has created one of the most
important clusters for US companies.
“American companies know Mexico. It is close and
manageable for them, so they see it as something
tangible, while Europe still looks at Mexico as something
yet to be understood.” For European companies, she adds,
manufacturing in Mexico is not a priority. Medisi is working
on attracting Europe based SMEs whose development
possibilities and trend-setting capacity are appealing for
the Mexican market.
Access is a two-way street and consultants such as Medisi
see a multitude of opportunities for international companies
interested in expanding their markets and for Mexico to
further open its doors to fresh innovations.
“The country is hungry for new possibilities,” says Luisa
Gutiérrez, Director General of Medisi, a consultancy
specialized in the medical devices segment. “Medisi
is focused on opening access channels to and from
Mexico.” She says Mexico is an excellent logistics point
and its stability provides confidence to the international
companies doing business here.
According to a Clear Water International Report on the
medical devices industry, Europe recorded the highest M&A
in medical devices in 2015 after the US. Chinese companies
are also interested in reaching out to Mexico but they have
quality issues to overcome, says Gutiérrez. “Mexico is a
logistics hub. We have great human capital, a strategic
location and many medical devices companies prefer to
print ‘Made in Mexico’ on their products instead of other
Asian countries,” she says.
Medisi’s goal is to attract companies that provide the best
quality at an affordable price. These are often from Israel
and Germany, countries where the industry is dominated
by SMEs offering innovation for good value. Companies
are watching currency exchange rates, she explains, so
purchasing decisions are mostly made on price. Gutiérrez
adds that Mexico’s purchasing trends are mostly driven by
commodity products instead of innovative ones. “Private
hospitals could benefit from high technology but they need
to consider prices,” she says.
Despite the opportunities, international companies
encounter many challenges when trying to access Mexico.
According to Gutiérrez, local factors like the lack of English
speakers are barriers to doing business here. She says that
incoming companies expect a reimbursement system,
which does not exist in Mexico because only 7 percent
of the population has private insurance. “Out of pocket
expenditure is about 50 percent and that is how healthcare
OPENING THE DOOR TO FOREIGN DEVICES
LUISA GUTIÉRREZDirector General of Medisi
353
354
Q: How is Grupo Saned innovating the channels of
communication in the pharmaceutical industry?
A: We are approaching the industry with different
marketing opportunities. One of the tools we are proposing
is storytelling. We have done more than 35 movies for
pharma companies in Spain and Mexico is interested in
adopting this tool. We also create motivational teasers for
patients to raise awareness about certain diseases and we
produce scientific dialogues wherein we put the spotlight
on an expert to create documentary material. Another of
our business lines is virtual reality, through which we can
create more empathy in the receptor.
Q: What should be the role of the pharmaceutical sales
representative in a technology-based marketing scheme?
A: More than 129 laboratories have been using sales
representatives for more than 70 years. We are innovative
in doing marketing focused on doing things differently but
that is inclusive of the resources that the company already
has. Grupo Saned is convinced there is no successful on-line
without a successful off-line. We have a partnership with
Grupo Nichos, which is specialized in human resources for
pharmaceutical sales forces.
Q: What is Grupo Saned’s main differentiator?
A: An advertising or marketing agency works for many
industries and when pharmaceutical clients request a
campaign, they cannot guarantee full compliance with
the pharmaceutical advertising regulations. We are the
only provider who belongs to CETIFARMA. We are also
CANIFARMA-authorized suppliers and we are certified
as an ethical and reliable company that provides services
according to industry criteria. Finally, we provide our clients
ROI information and we host satisfaction surveys.
Q: What are Grupo Saned’s plans for the future?
A: We have a research line currently only available in Spain.
This business demands focus so we are hoping to bring
it to Mexico. We want to extend our business model to
Colombia. Coming to Latin America and starting in Mexico
was a big step and we know that this will bring us new
opportunities in the rest of the region.
Q: What attracted Grupo Saned to Mexico for its first
subsidiary?
A: We arrived almost two years ago. We were attracted
by the size of the market and we wanted to diversify our
experience. I believe we probably came late but, despite the
delay, we know that no one else offers our value proposition.
We develop customized strategies for each client to reach
their objectives. We are bringing solutions that have
succeeded in Europe and that have been approved by the
strict compliance departments of companies such as GSK,
Pfizer, Bristol Myers Squibb and Eli Lilly.
Q: What educational opportunities is Grupo Saned
providing to the pharmaceutical industry?
A: Our educational offer is one of our most requested
solutions by the Mexican pharmaceutical market.
Traditional education is unilateral and there is no debate
between the receptor and the educator. The education
model is changing. We introduced 3.0: simple and
innovative educating actions in which the teacher gives
the students the main role in their education and learning.
This model is what we call Teach to Learn. We designed
our programs according to Dale’s Learning Cone, which
says that 90 percent of what we learn can be retained
when we teach it. We also looked at Maslow’s Pyramid,
which shows that recognition is a main human need. We
realize that people are looking for a cooperative learning
environment that can be delivered virtually and for
recognition of the content they produce. We also have
a program for educating patients because we believe
they will be more engaged with their treatment if they
understand the information provided by laboratories. We
also train doctors in affective and effective doctor-patient
communication and have a health sciences agreement
with Anáhuac University in which we develop content for
programs, which the university subsequently certifies.
INNOVATIVE MARKETING FOR THE PHARMA INDUSTRYNEIVI ORTIZDirector General of Grupo Saned Latin America
VIEW FROM THE TOP
Grupo Saned is a Spanish company with 37 years of
experience in pharmaceutical marketing through medical and
pharmaceutical publications, research, e-business, human
capital training, market access, advertising and information
355
HOW OPEN ARE MEXICO’S PUBLIC AND PRIVATE HEALTH SECTORS TO INNOVATION?
GUILLERMO FERRARI General Manager of Eseotres
ROGELIO DE LOS SANTOS Director General of Dalus Capital
IRMA EGOAVIL Director General of Ferring Pharmaceuticals Mexico
ROUNDTABLE
The first challenge is to achieve a cultural acceptance of change and to break the
barrier of resistance to install solutions whose end product is digital and not tangible.
Our clients have been working 15 to 20 years in the same way, so it is not easy to make
them embrace change. Working with public institutions presents other challenges.
Budgets need to be reassigned to adjust to service contracts. Tenders often do not
have a proper budget to contract the needed digitalization services. This is why we
received with great expectation the IMSS Innovation Olympics, an event that IMSS
launched in March 2017 for the first time. We see this competition as a key aspect
that was missing in order for IMSS to properly adopt innovation; a space where public
and private sector can transparently team up to develop innovative solutions that
are tailor made to fit the reality and needs of the institution.
The Global Entrepreneurship Monitor (GEM) study shows the leading drivers of
entrepreneurship in a country. The most important variable is education and a
mindset of scarcity and globalizing a project, as ideas must be relevant to other
countries. Often, people fall in love with their solution and not with the problem.
However, there are an increasing number of people with disruptive ideas finding
niches to capture value. Companies with experience and capital are increasingly
considering these types of opportunities. They are opening to the idea of innovation,
having venture capital areas or accelerators, inviting companies to solve problems
relevant to them. They are interested in opening up to working with others, including
competitors, because if companies do not find solutions, others will. Mexican groups
need to wake up and recognize innovation to be relevant in their markets and outside.
The way technological innovations can help patients varies according to therapeutic
areas. For example, we have an app for patients with inflammatory bowel disease that
provides information on the different stages of the disease and the reasons behind
its progression. The main issue for these patients is that even though the disease
may be controlled, there could be a specific event that pushes it to another stage.
We provide support and teach them to identify symptoms. Another program helps
patients with prostatic cancer track the disease properly, providing them with access
to prostatic antigen testing. Ferring also runs a program called BB en casa (Baby
at home) that helps patients with a fertility need who do not have the purchasing
power to access treatment.
In March 2017, during the third edition of the Innovation
Week organized by AMIIF, the assembled leaders discussed
the impact of innovation on the health sector and how
education could detonate economic development and
productivity in the country. Innovation has set trends in
health management, changing the way healthcare providers
make decisions, distribute budgets, collect and analyze
data, publish results and perform procedures. Mexico Health
Review asked industry players how innovations are received
in the Mexican health sector .
ACRONYMS
Acronym Full Name Translation (if applicable)
AIDS Acquired Immune Deficiency Syndrome
AMIIFAsociación Mexicana de Industrias de Investigación Farmacéutica
Mexican Association of Pharmaceutical Research Industries
AMIS Asociación Mexicana de Institutos de Seguros Mexican Association of Insurance Institutes
ANAISAAsociación Nacional de la Industria de Suplementos Alimenticos
National Association of the Nutritional Supplements Industry
API Active Pharmaceutical Ingredient
ART Anti-Retroviral Therapy
ARV Anti-Retro Virals
B2B Business to Business
B2C Business to Customer
CANIFARMA Cámara Nacional de la Industria FarmacéuticaNational Chamber of the Pharmaceutical Industry
CDMX Ciudad de México Mexico City
CENSIDACentro Nacional para la Prevención y el Control del VIH/SIDA
National Center for the Prevention and Control of HIV/AIDS
CEO Chief Executive Officer
CNS Central Nervous System
COFECE Comisión Federal de Competencia Económica Federal Commission for Economic Competition
COFEPRISComisión Federal para la Protección Contra Riesgos Sanitarios
Federal Commission for the Protection against Sanitary Risks
CONACYT Consejo Nacional de Ciencia y Tecnología National Council of Science and Technology
CRO Contract Research Organization
CSG Consejo de Salubridad General General Health Council
EMA European Medicines Agency
ENARMExamen Nacional de Aspirantes a Residencias Médicas
National Exam for Medical Residency Candidates
ENSANUT Encuesta Nacional de Salud y Nutrición National Survey of Health and Nutrition
FDA Food & Drug Administration
FPGCFondo de Protección contra Gastos Catastróficos
Fund for Prevention of Catastrophic Expenses
FTA Free-Trade Agreement
GD Gestational Diabetes
GMP Good Manufacturing Practices
GPS Global Positioning System
HIV Human Immunodeficiency Virus
IMSS Instituto Mexicano del Seguro Social Mexican Institute of Social Security
INEGI Instituto Nacional de Estadística y Geografía National Institute for Statistics and Geography
Acronym Full Name Translation (if applicable)
IoT Internet of Things
ISSSTEInstituto de Seguridad y Servicios Sociales de los Trabajadores del Estado
Institute of Safety and Social Services for Federal Workers
JCI Joint Commission International
LATAM Latin America
M2M Machine to Machine
M&A Merger & Acquisition
MTCT Mother to Child Transmission
NAFTA North American Free Trade Agreement
NCD Non-Communicable Disease
NOM Normas Oficiales Mexicanas Mexican Official Norms
NSF National Safety in Food
OECDOrganization for Economic Co-operation and Development
OTC Over the Counter
PAHO Pan-American Health Organization
PEMEX Petróleos Mexicanos
PPP Public-Private Partnership
R&D Research and Development
Rx Prescription Drugs
SAGARPA Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación
Ministry of Agriculture, Livestock, Rural Development, Fishing and Alimentation
SALUD Secretaría de Salud Ministry of Health
SEDENA Secretaría de la Defensa Nacional Ministry of National Defense
SEMAR Secretaría de Marina-Armada de México Ministry of the Navy
SINGREMSistema Nacional de Gestión de Residuos de Envases y Medicamentos
National System of Medicines and Bottle Residue Management
T1D Type 1 Diabetes
T2D Type 2 Diabetes
TPP Trans-Pacific Partnership
UNAIDS Joint United Nations Programme on HIV/AIDS
UNAM Universidad Nacional Autónoma de México National Autonomous University of Mexico
UNICEF United Nations Children’s Fund
VAT Value Added Tax
WHO World Health Organization
INDEX
1DOC3 152
3M Healthcare 111, 119, 306, 328
A3R 333, 340
ABC Medical Center 46, 47, 181, 192, 253, 276, 330
Accelerium 159, 161, 165, 177
Accord Farma 85, 102
ACROM 162, 163
Aeroméxico Cargo 225, 226, 229, 249
Agave Spa 205, 207, 214, 221
Alcon Labs 253, 279
Alfa Wassermann 80
Alliancesfa 344
Amerimed 35, 50
AMID 7, 20, 21, 112, 113, 127
AMIIF 7, 18, 19, 64, 65, 66, 70, 75, 160, 161, 177, 346, 355,
356
AMIS 285, 288, 289, 295, 300, 301, 356
AMSA 85, 97
ANADIM 225, 239
ANAFARMEX 225, 227, 247
Analitek 159, 175
ANCE 159, 172
Apotex 85, 94, 95
Arthrex 111, 122, 329
AsMed 55
Aspen Labs 9, 63, 64, 69, 105, 205, 210
Astrum Salud 135, 144, 145, 329
Bacher Zoppi 309, 318
Baker McKenzie 345
B.Braun 120, 128, 129, 326
Beckman Coulter 253, 265
Becton Dickinson 117
BioEden 200
Biofarma 205, 220
BioMarin 63, 67, 81
Biostem Technologies 181, 189, 199
Borgatta 253, 268
Bupa Global 36, 285, 287, 295
CANIFARMA 7, 16, 17, 90, 112, 121, 160, 161, 177, 354, 356
Cecyc Pharma 159, 170, 171, 176
CENSIDA 7, 24, 25, 92, 98, 152, 356
Centro de Oftalmología Monterrey 269
Check-Up Center 253, 264
Christus Muguerza 49
CINVESTAV 312, 313
COFEPRIS 7, 11, 14, 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 36,
51, 64, 65, 66, 67, 76, 79, 80, 81, 86, 87, 90, 91, 93, 94, 97,
99, 101, 104, 106, 113, 121, 129, 138, 139, 147, 154, 157, 160,
161, 162, 163, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175,
176, 177, 182, 184, 186, 187, 194, 195, 196, 198, 199, 200, 201,
203, 206, 213, 215, 216, 220, 234, 235, 238, 239, 241, 247,
256, 261, 278, 280, 292, 331, 335, 336, 339, 341, 343, 345,
346, 347, 348, 351, 353, 356
COMOP 253, 275
CONACYT 310, 311
Consorcio Mexicano de Hospitales 285, 289, 302
Continuous Medical Education Institute 317, 324, 325
Dalus Capital 262, 333, 349, 355
Deloitte 87, 103, 131, 135, 136, 137, 155, 254, 255, 333, 337
Diphsa 120, 225, 242, 243
Distribuidora Alpilo 236
Dräger 10, 23, 32, 108, 111, 112, 120
DSM 181, 197
DVA 225, 241
Elsevier 160, 333, 352
Emcure 85, 103
Epic CRO 159, 161, 167
Eseotres 140, 141
Expanscience 205, 216
Farmapiel 205, 215, 221
Ferring 72, 216, 253, 258, 259, 355
Fitbit 135, 151
Fligoo 35, 58, 59
Fujifilm 111, 116
FUNSALUD 7, 12, 22, 23, 183
Grupo Diagnóstico Aries 263
GE Healthcare 127, 135, 136, 148
Global Health Intelligence 109, 113, 142
GNK Logística 234, 235
Grupo Accses 309, 320
Grupo Bruluart 91
Grupo Franklin 181, 189, 198, 225, 243
Grupo Marzam 11, 225, 226, 230, 231, 248
Grupo Neolpharma 85, 88, 89, 328
Grupo PLM 10, 135, 139
Grupo PTM 111, 130
Grupo RFP 225, 227, 246
Grupo Saned 328, 333, 354
Grupo Unipharm 85, 87, 107
Grupo Vitalmex 35, 56
Hays 309, 319
Healthlinks 11, 176, 333, 334, 335, 341
Heidrick & Struggles 309, 321
Hetero 98
Higia Technologies 9, 135, 137, 154
Hogan Lovells 196, 201, 333, 347
Hospitales San Ángel Inn 45
Hospital Sedna 35, 46, 51
ICON 159, 169, 177
IIIFAC 143
IM Natural 213
Industrias Sintoquim 205, 218, 221
Inframedica 225, 245
Infinite Clinical Research 162, 163
INMEGEN 43, 181, 182, 188, 194
Instituto Ingenes 181, 190, 193, 245
ISSSTE 9, 11, 14, 17, 18, 35, 44, 45, 50, 53, 66, 70, 80, 81,
96, 116, 122, 130, 143, 146, 160, 163, 164, 177, 213, 247, 265,
312, 315, 317, 319, 342, 351, 353, 357
Janssen 9, 63, 65, 71, 73, 334
Jones Day 329, 333, 334, 348
KPMG 10, 52, 53, 64, 65, 77, 160, 333, 336
Kronos 309, 327
La Latino Seguros 292
Laboratorios Collins 10, 85, 86, 93, 201, 253, 278
Landsteiner Scientific 181, 183, 194
Laureate International Universities 323
Levic 225, 227, 228, 249
Linet Group SE 114, 115
Liomont 85, 90
Lundbeck 30, 63, 65, 78, 79, 254
Majicarga 225, 238, 249
McKinsey & Company 57, 285, 287, 294
Médica Sur 48
Medisi 353
Mediprint 131
Medistik 225, 231, 232
Medix 255, 267
Medtronic 111, 125, 127, 255
Merck 63, 66, 67, 75, 334
Merz 205, 211
Mexican Cardiology Society 260
Federal Ministry of Health 12, 13, 22, 24, 28, 30, 40, 42, 43,
44, 50, 53, 64, 68, 76, 139, 154, 160, 161, 198, 238, 239, 243,
247, 263, 265, 276, 286, 311, 312, 315, 335, 339, 347, 350
Ministry of Health of Mexico City 38, 39
Monterrey Ciudad de la Salud 350
Murguía Consultores 304
Nestlé 205, 209
Northcube 135, 149
Novartis 63, 64, 65, 76, 255, 279, 318, 329, 334
Novo Nordisk 9, 19, 156, 250, 253, 256, 257
NYCE 159, 160, 173, 176, 186, 335
Olivares 333, 346
Oriundo 87, 206, 333, 342, 343
Ottobock 178, 181, 183, 184, 185
PartnerRe 285, 286, 290, 291
PEMEX 35, 42, 43, 45, 52, 81, 122, 146, 182, 185, 188, 286,
319, 329, 351, 357
Perrigo 10, 85, 87, 105, 343
Pfizer 63, 65, 67, 70, 173, 334, 338, 354
Pierre Fabre 63, 64, 72, 73, 75
PPD 159, 161, 166
PRA Health Sciences 159, 164
Probionics 181, 183, 186, 187
Pro Pharma Research 351
PwC 77, 130, 226, 227, 333, 338, 339, 346
QuintilesIMS 138
RM Pharma 159, 168
RMA Mexico 191
Salud Cercana 135, 137, 146, 147, 262
Sanofi 38, 63, 68, 161, 181, 182, 195, 280
SCOR Global Life SE 285, 287, 303
Seguro Popular 9, 18, 33, 35, 36, 37, 40, 41, 46, 47, 51, 53,
66, 67, 81, 101, 124, 245, 265, 283, 286, 337, 342
Seguros Atlas 285, 287, 289, 302
Seguros GNP 287, 298, 299
Sesderma 205, 212
Sicamsa 225, 236, 249
Siemens Healthineers 111, 112, 121, 265
Signufarma 225, 240
SINGREM 225, 233, 357
SiSNova 285, 293
Smith & Nephew 111, 113, 124
Sports World 202, 205, 207, 217, 219
Swiss Hospital 35, 54
Swiss Tropical and Public Health Institute 253, 272, 273
Synthon 253, 261
Tecnológico de Monterrey 314, 322
Teva 8, 77, 80, 85, 96, 97
T-Systems 135, 153
UDIBI 159, 161, 174
Uhma Salud 135, 150, 262
UNAM 314, 315
UNICEF 7, 28, 29, 277, 357
UN Women 7, 27, 316
UPS 225, 226, 237, 238, 248
Vanquish 85, 92
VECO 225, 244
Willis Towers Watson 305
Wockhardt 85, 86, 87, 100, 101
Zydus Pharmaceuticals 99
INDEX
Inner Front Cover Novo Nordisk
4 Mexico Tourism Board: Photo -
Ricardo Espinosa - reo
12 Ministry of Health
14 MBP
16 MBP
18 MBP
19 Novo Nordisk
20 AMID
22 FUNSALUD
23 Dräger
24 MBP, MBP
27 UN Women
28 UNICEF
32 Dräger
38 MBP
40 Seguro Popular
41 Dräger
42 MBP
44 MBP
45 MBP
47 ABC Medical Center
48 Médica Sur
49 Christus Muguerza
50 Amerimed
51 Hospital Sedna
54 Swiss Hospital
55 MBP
56 MBP
57 McKinsey & Company
58 MBP
60 Medix
66 MBP
68 Sanofi
69 MBP
70 Pfizer
71 MBP
72 MBP
75 MBP, Alfa Wassermann, MBP
76 Novartis
78 MBP
80 Alfa Wasserman
81 MBP
82 Hetero
88 Grupo Neolpharma
90 MBP
91 MBP
92 MBP
93 MBP
94 Apotex
95 Apotex
96 MBP
97 AMSA
98 MBP
99 Zydus Pharmaceuticals
100 MBP
102 MBP
103 Accord Pharma
104 Aspen Labs
105 Perrigo
107 MBP
108 Dräger
114 MBP
116 Fujifilm
117 MBP
119 3M
120 MBP
121 MBP
122 Arthrex
124 Smith & Nephew
125 MBP
128 B.Braun
PHOTO CREDITS
INFOGRAPHICS
26 COFEPRIS Breaks Down Barriers
37 Mexico's Healthcare System
52-53 National Health System Under the Spotlight
126-127 The Medical Devices Segment in Mexico
6 Grupo Bruluart
21 Pierre Fabre
29 NYCE
34 Arthrex
39 Linet Group SE
43 Amerimed
62 Aspen Labs
74 Anfitriones
79 Olivares
84 Apotex
88-89 Grupo Neolpharma
92 DVA
101 Hetero
110 Becton Dickinson
118 Convatec
129 Siemens Healthineers
134 APE Editorial
141 QuintilesIMS
157 Mexico Business Events
171 RM Pharma
180 Medistik
204 Sports World
208 Nestlé
212 IM Natural
224 Levic
252 Sanofi
259 Hospital Sedna
284 Mexico Business Publishing
291 SiSNova
308 Mexico Health Summit
313 CINVESTAV
332 UDIBI
ADVERTISING INDEX
266 Obesity: A Growing Problem
296-297 The Main Causes of Death in Mexico
300-301 Challenges Ahead for Health Insurance
130 MBP
131 MediPrint
132 Médica Sur
138 MBP
139 Grupo PLM
140 MBP
142 Global Health Intelligence
143 MBP, MBP
144 MBP
146 MBP
148 MBP
149 Northcube
150 MBP, MBP
151 Fitbit
152 1DOC3
153 T-Systems
154 Higia Technologies
155 Deloitte, Deloitte
156 Novo Nordisk
162 MBP
164 MBP
165 Accelerium
166 MBP, MBP
167 Epic CRO
168 RM Pharma
169 MBP
170 Cecyc Pharma, MBP, MBP
172 ANCE, ANCE
173 MBP
174 MBP
175 MBP
177 Accelerium, MBP, MBP
178 Ottobock
184 Ottobock
185 Ottobock
186 Probionics
188 INMEGEN
189 MBP, MBP, MBP
190 Instituto Ingenes
191 MBP
192 CINVESTAV,
ABC Medical Center
193 Instituto Ingenes
194 MBP
195 Sanofi
197 DSM
198 MBP
199 MBP
200 MBP
202 Sports World
209 Nestlé
210 MBP
211 MBP
212 Sesderma
213 MBP
214 MBP
215 MBP
216 MBP
217 MBP
218 MBP
219 Sports World
220 Biofarma
221 MBP, MBP, MBP
222 Grupo Neolpharma
228 MBP
229 MBP
230 MBP
231 Medistik
232 MBP
233 MBP
234 MBP
236 Sicamsa
237 UPS
238 MBP
239 MBP
240 MBP
241 MBP
242 Diphsa
243 MBP
244 MBP
245 MBP
245 Instituto Ingenes
246 MBP
247 MBP
248 MBP, UPS, MBP
249 MBP, MBP, Sicamsa, MBP
250 Novo Nordisk
256 MBP
257 Médica Sur
258 MBP
260 MBP
261 MBP
262 Grupo Diagnóstico Aries
264 MBP
265 MBP
267 Medix
268 MBP
269 Centro de Oftalmologia
de Monterrey
272 Myriam Lingg
275 MBP
276 ABC Medical Center,
ABC Medical Center
278 MBP
279 Alcon Labs
282 La Latino Seguros
288 AMIS
289 MBP
290 PartnerRe
292 MBP
293 SiSNova
294 McKinsey & Company
295 MBP
298 Seguros GNP
302 Consorcio Mexicano
de Hospitales
303 MBP
304 Murgía Consultores
305 Willis Towers Watson,
Willis Towers Watson
306 3M
310 CONACYT
312 MBP
314 Technológico de Monterrey
315 MBP
317 Continuous Medical Education
Institute
318 Bacher Zoppi
319 Hays
320 MBP
321 MBP
322 Technológico de Monterrey
323 Laureate International
Universities
324 Continuous Medical Education
Institute
326 B. Braun
327 Kronos
328 Grupo Neolpharma, 3M,
Grupo Saned
329 Arthrex, Jones Day, Novartis,
MBP
330 ABC Medical Center
336 KPMG
337 Deloitte, Deloitte
338 PwC
340 MBP
341 Healthlinks
342 MBP
344 MBP
345 Baker & McKenzie
346 MBP
347 MBP, MBP
348 Jones Day
349 Dalus Capital
350 MBP
351 Pro Pharma Research
352 MBP
353 Medistik
354 Grupo Saned
355 MBP, Dalus Capital, MBP
Inner Back Cover Ottobock
CREDITS
JOURNALIST & INDUSTRY ANALYST: Sophie Murten
JUNIOR JOURNALIST & INDUSTRY ANALYST: Camila Del Villar
EDITORIAL MANAGER: Daniel González
EDITORIAL MANAGER: Tomás Sarmiento
EDITOR: Ricardo Guzmán
MANAGING EDITOR: Mario Di Simine
PUBLICATION COORDINATOR: Marta Aguilar
JUNIOR PUBLICATION COORDINATOR: Blanca San Martín
COMMERCIAL DIRECTOR: Jack Miller
GRAPHIC DESIGNER: Ailette Córdova
JUNIOR DESIGNER: Mónica López
DESIGN DIRECTOR: Marcos González
WEB DEVELOPMENT: Omar Sánchez
COLLABORATOR: Sara Warden
COLLABORATOR: Nadine Heir
COLLABORATOR: Gaby Mastache
COLLABORATOR: Alicia Arizpe
COLLABORATOR: Luis Pesce
CIRCULATION MANAGER: Elizabeth Solís
DIRECTOR GENERAL: Jeroen Posma
Foli, Negra Modelo # 4 Bodega A Fracc. Cervecería Modelo, Naucalpan Estado de México T:. 9159 2100
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