Competition Forces Smaller Players to Up Their Service Game

Q: How have you advanced in your goal to increase sales of paracetamol and diclofenac?
A: We are still focused on the international market. Unfortunately, we are just exporting small volumes through distributors in a few Latin American countries. We have not been able to get big contracts for generics, yet. We will have meetings throughout 2019 with associations of distributors in South America. The US is also a priority for us, even though we might face some challenges in terms of logistics. We would also like to export our products to Southeast Asia.
Q: What are your views on overuse of antibiotics, painkillers and anti-inflammatory medication in Mexico?
A: I do not necessarily see this trend leading to a reduction in effectiveness or more resistance in the body. What I see is that people often use these medications in wrong dosages and for conditions for which they might not be intended. This makes the treatment less effective. This problem is mainly rooted in the fact that Mexicans have a tendency to make medical decisions without consulting a doctor. People have a fever or a headache and take pills. They continue to self-medicate, with 70 percent of medication used this way. Having doctors at the point of sale has been an effective way to mitigate this issue. Pharmacy clients can now consult a doctor for a small fee and receive a professional diagnosis. The prescription does not have to be a new medication of some innovative molecule. It can be paracetamol but at a better dosage and with indications of use.  
Q: What are your strategies to remain competitive against large pharmacy chains?
A: Competition is inevitable. On the one hand, it has a positive effect because it forces smaller pharmacies to level up their service. Before, clients had only one pharmacy in their neighborhood. It could be good or bad, but it was the only option. Now there are two or three and competition has gone up. It has forced us to make changes too. We diversified our portfolio, offering new products in areas such as food supplements and prevention. People will now find more specialized products, including patented medications. We have also increased the number of campaigns we run to raise awareness about health and nutrition.
Q: What is your view on lengthening licenses for patents and the inherent risk of creating monopolies and raising medicinal costs?
A: Twenty years is enough time for pharmaceutical companies to recover their investment and gain resources to develop new medicines. Efforts to lengthen these patent licenses have impacted us directly and indirectly in terms of costs. Pressure has also elevated standards in the generics market in management of stocks and distribution. It is a delicate balance and there must be an incentive for development and the recovery of investment. But we must also ensure that medications are affordable for the population. In the US, development of new medications is supported by a financing mechanism covered by insurance agencies. But this is not easy to recreate in Latin America where spending on medication is largely out-of-pocket and insurance coverage for medication is minimal.
Q: What are your expectations regarding out-of-pocket expenditure?
A: In the short term, the current restructuring of national health institutions will lead to higher out-of-pocket spending. Even though we have had a new government for over six months, institutions are a bit paralyzed still. The government is trying to restructure its purchasing processes and this will be reflected in many people who formerly went through Seguro Social and ISSSTE now having to spend their own money on medication. Institutions will eventually start operations again, but it will take time and there will be a great deal of uncertainty in the meantime. We do not know whether the model the government wants to introduce will work or not and the information is still limited.