Gurulinga Konanur
Director General
Hetero Mexico
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Insight

Manufacturate Locally to Create Affordable Prices

Wed, 09/06/2017 - 13:11

Generics provide a cost-effective alternative to branded products, allowing for more accessible healthcare. This is important as the general population is more financially able to purchase the treatment it needs and the public sector health institutions are able to purchase a larger quantity of drugs. Despite initial reservations, the generics market in Mexico is growing, mostly due to government consolidated purchasing preferences for generics as it allows the treatment of more patients on a shrinking budget.

Hetero Group, an Indian generics company, is one of the main manufacturers of antiretroviral therapy drugs (ARVs) worldwide with a third of the world’s market share. “For every three patients, one is taking a Hetero product either directly or indirectly as we supply APIs to other suppliers,” says Gurulinga Konanur, Director General of Hetero Mexico. “We want to bring all these high-tech, high-specialty products to Mexico, manufactured locally at an affordable price,” he says, adding that the company expects Mexico to be among its best growth performers in Latin America. “The generics market in Mexico is growing over 20 percent per year and even branded generics are growing when compared to innovative products.”

The general population is also increasing its generic purchases as many must pay out of pocket in one of the most privatized healthcare systems in the world. The OECD reports that only 5.8 percent of GDP in 2015 in Mexico was spent on healthcare, almost half of which was out of pocket. Indeed, access to healthcare is one of the greatest challenges facing the Mexican healthcare system. INEGI figures show that only 62.2 million people had access to IMSS services as of July 2016 and despite government efforts, this figure represents only a 33.3 percent increase in the 10 years since 2006.

The prevalence and availability of generics is important for pandemics such as HIV/AIDS because drugs for these diseases can be expensive and are needed by many. HIV/AIDS treatment in Mexico is free for all, whether registered with a health institution or not. It is therefore important for drugs to be cost-effective. In 2015, the

National Center for the Prevention and Control of HIV/ AIDS (CENSIDA) reported around 200,000 people living with HIV in Mexico and an estimated 100,000 new infections. UNAIDS estimates there were 4,000 AIDS- linked deaths in Mexico that year.

Although generics are growing at a faster rate and allow for better access, the population continues to demonstrate a brand bias, showing a preference for branded generics. “I think over 70 percent of the Mexican population would look for a good branded generic,” says Konanur. He adds that although it took some time for branded generics to be accepted, doctors are now comfortable prescribing them. “Pharmacists also encourage generics. They receive many kinds of incentives to promote the generics of the pharmacies they belong to,” Konanur says. This is most likely aided by the fact that many pharmacies stock their own-brand generics and are looking to boost sales, he says.

Another main issue with access to medicine is the growing counterfeit or black market. Many companies are taking precautions to ensure they are not inadvertently participating in this by ensuring both their medicine and packaging does not fall into the wrong hands, says Konanur. He explains that the generics sector is seemingly less affected because the products are cheaper and more widely available, adding that it is often the larger names that are subject to counterfeit, just as in other sectors. “I have not seen as many issues with counterfeits in generics as in innovative products. The sales margins are smaller in generics so they are not affected so much,” says Konanur, adding that his company employs many innovative packaging techniques that make the boxes difficult to imitate. “We have one of the most innovative packaging departments in the world.”

To further expand its Mexican presence, the company has acquired land near Toluca and expects to be manufacturing products from a custom-built factory there by the second quarter of 2018. “We are in the planning stages and by January 2017 we will be kick-starting construction,” Konanur says, adding that foreign investment has aided the process.