Electronic Prescriptions Can Help Mitigate VAT Impact on Insurers

The elimination of input VAT on operations related to indemnities and medical service payments, applicable from 2026, represents one of the most significant fiscal changes for the insurance sector in Mexico in recent years. This regulatory adjustment, driven by the tax authority to close loopholes for undue crediting, will force insurers to absorb a higher tax cost in transactions related to claims, repairs, hospital services, and, particularly, medications.

This new fiscal environment creates additional pressure on the finances of the insurance sector, which has historically relied on input VAT crediting to balance the operational cost of medical claims. Now, without that possibility in certain cases, companies will need to seek more efficient ways to manage their spending, optimize processes, and increase transparency in the healthcare value chain.

In this scenario, electronic prescriptions emerge not only as a tool for modernizing the healthcare system but also as a strategic lever for financial efficiency. In recent years, their adoption has grown due to the digitalization of the health sector, but their true purchasing and operational potential becomes fully relevant in a context where every peso allocated to medications must be justified, measured, and controlled precisely.

This article analyzes the current fiscal environment, the challenges faced by insurers, and how electronic prescriptions position themselves as a key tool for intelligently managing pharmaceutical spending, both in hospitals and pharmacies, reducing risks, unnecessary costs, and operational leakages.

A Fiscal Change That Transforms the Management of Medical Spending

The fiscal modification that will come into effect eliminates the possibility for insurers to credit VAT on goods or services whose sole purpose is to indemnify the insured. This includes numerous common operations in medical and auto insurance, such as:

• Acquisition of medications
• Payments to hospitals
• Medical services related to claims
• Repairs or supplies to third parties
• Purchases of inputs related to indemnities

For insurers, this change represents a direct financial impact. The VAT that was previously credited as a receivable tax becomes a non-recoverable expense, increasing the operational cost per claim.

As a consequence, three effects are anticipated:

• Increase in the direct cost per claim, particularly for medications dispensed in hospitals, where prices tend to be higher
• Potential increase in premiums to offset the fiscal impact
• Greater pressure to improve operational efficiency, reduce leakages, and avoid unnecessary expenses

In this last point, digitalization — and particularly electronic prescriptions — becomes a strategic enabler.

Pharmaceutical Spending: Sensitive and Difficult Area to Control

In the cost structure of a medical claim, medications represent one of the most relevant items. Three factors have historically complicated their control:

a) Price Heterogeneity by Channel

The same medication may have a significantly different price if acquired in:

• Hospital
• Private pharmacy
• Chain pharmacy
• Wholesaler
• Institutional supplier

In hospitals, there is also a tendency for higher prices due to administrative costs, inventories, and included services.

b) Lack of Traceability in Prescription

Illegible, duplicated, or incomplete prescriptions can lead to:

• Dispensing errors
• Overcosts
• Unindicated or non-covered medications
• Fraudulent claims
• Misuse of benefits

c) Lack of Transparency in Dispensing and Operations

Without a digital mechanism that automatically verifies what was prescribed, what was dispensed, and at what price, it becomes more challenging to audit spending and detect inconsistencies in real-time.

In a context where VAT will no longer be recoverable, these inefficiencies translate directly into an additional non-compensable cost, making it essential to implement more efficient prescription and dispensing systems.

Electronic Prescription as a Strategic Lever to Mitigate Fiscal Impact

Electronic prescriptions are not just a technological tool. When implemented correctly, they become a financial control system that directly impacts the cost structure of the insurer. Their benefits are tangible:

1. Direct Control of Pharmaceutical Spending

Electronic prescriptions standardize the prescription process within a digital framework that incorporates:

• Updated catalogs,
• Validation of the physician and their credentials,
• Traceability of each medication presentation,
• Authorized quantities,
• Prices linked to the pharmacy network and commercial agreements.

This allows for:

• Avoiding over-prescription
• Controlling the maximum price that the insurer will pay
• Linking the dispensing directly to agreements
• Preventing the payment for unauthorized medications

With each digitally signed prescription, the margin of error is reduced, and operational auditing is strengthened.

2. Transparency and Total Traceability of Dispensing

Each electronic prescription can incorporate:

• Unique codes per batch
• Verifiable barcodes or QR codes
• Online dispensing records
• Validation at the point of sale
• Registration of date, time, and responsible party for dispensing

This creates a complete digital chain of custody, allowing for:

• Avoiding dispensing duplication
• Detecting irregularities
• Controlling inventories
• Validating that the dispensed medication matches what was prescribed

For insurers, this means eliminating financial leakages arising from manual or non-standardized processes.

3. Efficient Implementation of Direct Payment Models

Reimbursement is the most costly, slow, and inefficient process for insurers. Electronic prescriptions enable direct payment schemes with clear rules, where:

• The electronic prescription serves as authorization
• The pharmacy validates coverage in real-time
• The insurer pays only for what was dispensed and authorized
• The patient incurs no out-of-pocket expenses
• The system reduces paperwork and claims

In a context where recoverable VAT disappears, reducing claims and administrative costs becomes a priority.

4. Reduction of Hospital Spending by Shifting Part of the Dispensing to Pharmacies

A significant portion of hospital costs comes from medications included in the discharge bill. These same medications often have significantly lower prices at pharmacies.

With electronic prescriptions:

• Patients can dispense at a wide network of pharmacies
• Costs are lower than in hospital inventories
• The insurer pays less for the same medication
• Pressure is reduced on non-recoverable VAT associated with hospital billing

This simple operational change can represent millions in annual savings for a medium-sized insurer.

5. Improved Therapeutic Adherence and Reduced Rehospitalization

Proper therapeutic adherence reduces:

• Complications
• Readmissions
• Use of high-cost hospital medications

Electronic prescriptions can integrate with:

• Smart reminders
• Automated follow-up
• Proactive contact
• Dispensing validation

A lower readmission rate implies lower medical spending and reduced payment of non-recoverable VAT.

A Strategic Vision for Insurers Amid the New Fiscal Context

The elimination of recoverable VAT forces the insurance sector to evolve toward more efficient and precise models of claims management. In this sense, electronic prescriptions not only offer operational benefits, they are a tool to protect the financial health of the sector.

Insurers that adopt an electronic prescription model with connected pharmacy networks will be able to:

• Reduce the average cost per claim
• Improve audits and controls
• Minimize leakages and overcosts
• Strengthen commercial agreements
• Optimize inventories and purchases
• Decrease litigations and claims
• Mitigate the impact of the new fiscal burden

In summary, electronic prescriptions are a strategy for financial efficiency, not just a technological solution.

Conclusion

The fiscal change that eliminates recoverable VAT on operations related to indemnities represents a significant challenge for the insurance sector in Mexico. In light of this new scenario, it is essential to implement tools that allow for better control of medical spending, increased traceability, and improved operational efficiency.

Electronic prescriptions position themselves as one of the most powerful enablers to achieve this. They not only facilitate digital prescriptions and reduce errors, but they also provide deep control of the dispensing process, connect the insured with a pharmacy network, decrease hospital spending, and offer certainty in medication management.

In an environment where every peso must be managed with precision, electronic prescriptions are not an accessory: they are an indispensable strategic lever for building a more efficient, transparent, and sustainable healthcare system.