Enrique Martínez
Director General
Pharmaceutical Innovation and Research Institute
José Ferreyra
Pharmaceutical Innovation and Research Institute
View from the Top

Integral Services Lead Public Sector Purchasing

Wed, 09/07/2016 - 16:12

Q: What information can pharmaceutical companies obtain from the audits IIIFAC conducts?

EM: We conduct audits of the public sector market, the most important one being INEFAM-SP, which provides strategic information on pharmaceutical sales to that segment. This audit stands out for its comprehensive information, covering 95 percent of market value and representing excellent input for pharmaceutical companies’ strategic decisions. Looking closely at the public sector is essential, considering that it accounts for more than 50 percent of the overall pharmaceutical market. On the other hand, our INEFAM-RX audit generates data on the prescription market.

JF: The Mexican public healthcare system consists of more than 150 public institutions or payers, which provide healthcare services to more than 115 million Mexicans. These institutions have different purchasing habits, basic formularies and pricing lists, making drug acquisition highly complex. Basic formularies have different formulary codes for each medicine, and our mission is to help clients understand what products are acquired, at what price, and who is providing them. While there can be a dominant player taking over IMSS and ISSSTE its presence can be weak in other states or institutions.

Q: What are the most relevant purchasing behaviors of public institutions regarding innovative drugs?

EM: Institutions have their own drug review processes, which duplicate the process executed by the General Health Council. They face the problem of allocating resources to a specific medicine while divesting in other areas. Like any other healthcare system in the world, there is a plethora of needs and scarce resources to satisfy them. A study we conducted between 2009 and 2013 found there are medicines incorporated into the National Formulary that are still not acquired by any institution and sometimes they only buy 40 or 50 percent. In the case of biotech drugs, 111 out of 128 products were acquired by public healthcare institutions between 2009 and 2014.

Q: Given the lack of resources in public institutions, how can companies improve market access?

EM: The concept of market access is also understood differently by companies. A pharma-economic study is just one part of the process in developing a full health economics study but regardless of the results obtained we know the studies will not guarantee access to institutions. An actual access strategy must include communicating scientific knowledge to create understanding and demand. This is why companies have developed models to improve access through specialized human resources who are knowledgeable of the public market and the differences among institutions. Within a company, coordinated efforts should be made by leaders opening the market and executives positioning the products. Different strategies are required depending on the nature of the product such as generics, high specialty or orphan drugs. Other important factors are the targeted institutions and price.

Q: What services are public institutions demanding with the rise of consolidated purchasing and subrogation?

JF: The practice of consolidated purchasing is standardizing the sector. Decentralized institutions are acquiring integral services for purchasing, storage and distribution of supplies, as well as the delivery of services directly related to the patient. Integrators also support institutions by managing sophisticated and expensive equipment along with expert personnel. In addition, specialized services such as hemodialysis are being handled by third-party clinics today. This is changing market dynamics in such a way that pharmaceutical providers now have to negotiate with private companies holding subrogated services. These kinds of services are now worth MX$20 billion (US$1.8 billion) and are growing significantly. This is an innovative commercialization model and as declared by the Ministry of Health the greatest demand for the industry is to stop selling supplies and provide health services instead. The fact the market is demanding integral services and shared risk models will make professionals understand how to deliver value.

EM: From 80-90 percent of sales of high specialty medicines are made to government institutions so companies will have to face the challenge of adapting.