Q: What have been the most common scenarios your clients have faced regarding the centralized purchasing scheme and the UNOPS tender process?

LH: We went from all players in the pharmaceutical industry sharing the same rules to having to learn to play with INSABI’S new partner, UNOPS. Aside from learning a completely different framework, companies had to understand the rules between the federal government and UNOPS, which are comprised in a general agreement that is not public.

The second change and challenge involve the transparency and management of information; companies submit information to UNOPS, which is then passed to the government, and which could be publicly available as part of its transparency obligations.

Contract compliance is yet another challenge. Derived from the changes in the acquisition process, the government is delaying orders, which has caused medicine shortages at public institutions.

The industry comes from a very clear framework on medicine distribution with the government, which outlined a clear means of recourse. If there was a disagreement regarding the process, companies were able to initiate administrative actions against the process; however, under UNOPS´ regulation, companies have to initiate a dispute resolution procedure, which is not regulated under Mexican legal framework.

LM: Some of these challenges were first seen before the reform to the Acquisition, Leasing and Public Services Law, when the government decided to change their acquisition practices, removing distributors from the medicine purchasing scheme. From this point on, we helped our clients to understand the new processes and practices, by developing new proposals under the new rules.

Q: What were the main challenges your clients in the medical devices sector faced amid the pandemic?

LH: Many startups approached us during the first months of the pandemic for regulatory guidance related to ventilator developments they wanted to introduce to the market, unfortunately deficiencies and improvised changes within COFEPRIS’ compliance processes affects the possibility to register these devices. Furthermore, the commission’s approval backlog is immense; it is re-requesting dossiers and copies related to the existing processes, which sends the wrong message to the industry because you might think the information has been lost.

One positive matter is the recent change in the Federal Commissioner, who has already met with industry associations and began COFERIS Educa (COFEPRIS Educates) to address doubts regarding processes and regulation criteria.

LM: These constant changes have generated uncertainty among clients and players wanting to enter the Mexican market, which halted their investments in the country. As for the new commissioner, we have sensed a stricter approach and a higher efficiency in responses. 

Q: What were the most significant changes to the IP Law brought about by USMCA?

LH: USMCA introduced a new IP law with positive changes, such as the fact that the linkage system is regulated in the law rather than in the regulation, patentability for new uses is also considered in this new law, claims for damages, raised from patent infringement, can be determined by the Mexican Patent and Trademark Office, whereas in the past, this had to be litigated before civil courts after the patent infringement procedure.

Q: What does the new regulatory framework on medical cannabis imply for the industry? 

LH: Medical cannabis and some of its industrial uses have been regulated since 2017 due to a reform to the General Health Law. Nevertheless, this year, a medical cannabis regulation was issued, responding to the reforms of 2017. However, it is not very transformative because medicinal cannabis was already regulated as psychotropics and/or narcotics in terms of the General Health Law

LM: It is important to bear in mind that up to today, the regulations for recreational cannabis use are still pending to be formally published in the Federal Official Gazette, therefore, and as the text of these regulations are still not definitive, entering into its analysis could be challenging as this may be changed.

Q: What impact have you seen from the changes to food and beverage labeling?

LM: One of the main challenges our clients have faced is the rebranding and labeling process for their packaging. This required an additional investment in new marketing and branding. Some of our clients redesigned their packaging but others had to even acquire new equipment to comply with the new regulation. This modification to NOM-051 did not contemplate the impact it would have on companies subject to comply with its content. Companies also had to rethink their strategies and introduce them to the market, which is time consuming. Moreover, they already had the original products on the shelves, which put them at risk of being accused of not complying with the regulation. Dates are also unclear and they change constantly as the authorities introduce further changes to what was previously stated on the further stages for complying to the amendments of NOM-051.

Galicia Abogados is Mexico’s leading transactional firm with a strong regulatory offering supported by its strategic litigation capabilities. The firm has 25 years of experience advising a wide array of national and international clients.