Bernardo Martínez-Negrete
Partner
Galicia Abogados
Lisandro Herrera
Lisandro Herrera
Associate
Galicia Abogados
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View from the Top

Local Law Firm Shines a Guiding Light on Pharma Sector

Wed, 09/05/2018 - 09:58

Q: How would you describe the current profile of the pharmaceutical sector?

BM: The pharmaceutical market is composed mostly of former players that have operated in the country for many years and some new entrants that manufacture biotechnological products. Previously, pharmaceutical companies handled all these matters internally but it is almost impossible for a single company to administer all the regulations due to its extension. The demand for pharmaceutical products is completely inelastic. This has led competition authorities to closely monitor manufacturers and distributors to avoid collusion.

Q: What are the main barriers faced by companies to introduce medicines into the country?

BM: The main barrier, both for a local or foreign manufacturer, is the large number of regulations. For a product to be sold in Mexico, it must have a marketing authorization issued by COFEPRIS; there is room for improvement in the regulatory process to expedite the granting, and, eventually, the renewal, of such permits. The problem is aggravated by the fact that some processes must be approved by the Mexican Institute of Intellectual Property (IMPI).

LH: There are also many barriers to access. Once a medication has a marketing authorization issued by COFEPRIS, it is still not possible to sell it to public institutions because all products must first enter the basic list of the General Health Council, which can take up to several years. Then it is necessary to enter the basic lists of each public institution to be able to sell them. This process takes a considerable amount of time and resources, complicating the entrance of innovative medications into the country.

Q: What are the main challenges of IP enforcement and how does it affect investment?

LH: IP rights enforcement in the pharmaceutical sector is complex, as it requires first a resolution from IMPI that can take some years. This decision must be validated by the Federal Court of Administrative Justice, adding more time. Even if the court supports IMPI’s decision, the offending party can initiate another legal process (amparo), which can take another couple of years to be solved. It is then necessary to go to Civil Court to sue for damages, adding another several years to the entire process, plus the time it can take to enforce the sentence.

Q: What are the most common services offered by Galicia Abogados to the pharmaceutical sector?

BM: M&A transactions are common as the pharmaceutical sector faces constant patent expirations, hence the need to divest prior to the entrance of generic products. Distributors often negotiate for exclusive sales rights, which under some circumstances are illegal in Mexico as they can lead to monopolistic practices. We also help clients meet the standards of their clinical studies, including informed consent in accordance with current regulations.

LH: We receive requests from foreign parties interested in selling their products in Mexico. We also guide hospitals, doctors and manufacturers that perform clinical trials on how to abide by the laws concerning personal data.

Q: What opportunities does Galicia Abogados foresee in Mexico?

LH: A regulation that could have a strong impact on the market is the approval of medications generated from cannabis and its derivatives, since it will attract many foreign companies. The country also has great opportunities springing from its international treaties, such as the Pacific Alliance, CPTPP, EU Trade Agreement, EU Free Trade Association and NAFTA.

BM: In 2017, the General Health Act was modified to include vaccination as a priority for national health, forcing the federal government to set aside a special budget just for vaccination and to generate and pay for vaccination campaigns.