Mexican Retail Pharma Market Returning to Pre-Pandemic Trend

By the end of this year, the audited retail market in the Latin American region will be valued at US$53.3 billion registering growth versus the previous year of 12 percent, with Brazil, Mexico and Argentina providing the greatest contribution to annual growth, with Brazil having a 48 percent share, Mexico with 17 percent and Argentina with14  percent. Together, these three countries contribute 86 percent of the retail growth in  the Latin American region.

During the pandemic, the Mexican pharmaceutical market demonstrated a solid health infrastructure through distribution channels and an efficient private health system.

As a result, the private pharmaceutical market increased its value base from US$7.7 billion in 2019 to US$9.9 billion accumulated so far in2022, registering an accumulated growth of 12 percent during the years of the pandemic (Figure 1).

The value of the market had registered double-digit growth at the end of 2021, mainly driven by the drugs indicated for conditions related to the variants of COVID-19.

Today, it is inevitable to look back on how the pharmaceutical market has evolved over the last three years, identifying the rapid growth of the sector and the high resilience of the industry to face market trends like never before with positive results.

During the first wave of COVID infection in March 2020, we saw the market shrink 24 percent to a total audited market value of US$1.7 billion. After this historical fall, and sustained by the uncertainty that existed about how to act in the face of a condition that at that time we were in the process of learning, the results were surprisingly positive, registering historical growth, with the third quarter of 2021 seeing the highest growth registered in the last three years, growth that valued the market in Q3 at US$2.6 billion, representing growth of 27 percent versus same quarter in 2020, 35 percent versus 2019 and 42 percent versus 2018.

The main therapeutic groups that grew during 2020 and 2021 were: Diagnostic Agents (T) with 58 percent growth (US$131 million value) driven mainly by COVID tests; Blood and Hematopoietic Organs (B) with growth of 52 percent (US$382 million ) mainly driven by acetylsalicylic acid; the third therapeutic group is Antiparasitic (P) with 27 percent growth (US$121 million), with growth driven by Ivermectin; followed by the therapeutic group Digestive and Metabolic (A) with 22 percent growth (US$2.2 billion), driven by ascorbic acid and cholecalciferol., Another therapeutic group that benefited from the pandemic was Antineoplastic and Immunomodulating Agents (L) with 21 percent growth (US$210 million e), mainly driven by pidotimod molecules and immunoglobulin anti-interferon gamma.

Although some therapeutic groups benefited from the pandemic, others were negatively affected by changes in people's habits due to health restrictions that had them staying at home most of the time. As time goes by and populations relax as the restrictions and social distancing measures are eased, it is inevitable to return to our pre-pandemic habits, which will make therapeutic groups such as Dermatological and Ophthalmological (Sense Organs) return to their sales behavior before the pandemic.

If we review the number of launches of new drugs or new product presentations in the last four years, as shown in Figure 4, we can see that the rate of launches during the years 2018 and 2019 remains above 1,000 new registered products in the audited retail market, even though in 2019 it registered a drop of 8 percent versus 2018 but maintained the percentage of launches during the year.

Even though the market registered favorable growth in 2020, as we reviewed at the beginning of this article, the growth was driven by what drugs were ready for sale at that time and not by new launches through retail channels. As we can see in figure 4, in 2020, a significant drop in new launches was registered, resulting in 16 percent fewer launches than in the previous year 9, dropping to a rate of just over 860 new launches.

Even though the pandemic closed borders, considerably affecting the displacement of APIs for the manufacturing of medicines, many national and multinational manufacturers decided to postpone their launches as a precautionary measure by conserving operating expenses due to the new dynamics of virtual promotion that was being carried out with healthcare professionals. They recovered their launches at the beginning of 2021, going from 25 percent of average launches during the first quarter of recent years to 34 percent of launches in the first quarter of 2021, thus registering a total increase in the year of 24 percent compared to 2020, returning to new launch rates above 1,000 new products.

Analyzing the data recorded in our retail market audits and considering the market habits that are emerging, we can consider that the market trends will return to pre-pandemic behaviors, although we must say that the commercial and promotional strategies will consider the new dynamics of virtual promotion and digital strategies, while returning to the face-to-face promotion seen previously before, boosting sales through the traditional retail channel.