Challenges in the Face of a Changing MarketWed, 09/06/2017 - 10:02
Q: 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 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?
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.