Mexico’s Healthcare System: Challenges and SolutionsBy Mario Muniz | Thu, 07/08/2021 - 13:10
The Mexican Healthcare System presents significant challenges for all of its players, not only due to the high fragmentation of its multiple entities (Figure 1), but also due to the constant evolution it presents in terms of regulation, structure and decision-making stakeholders.
One of the main challenges in the healthcare system in Mexico is its low expenditure in health. Mexico presents a lower expenditure in health as a percent of Gross Domestic Product (GDP) compared to the average of Latin America and to the average of the OECD (Figure 2).
Additionally, Mexican expenditure in health is also below other Latam countries regarding the share of government (public) expenditure in health and in the government expenditure share compared to total GDP (Figure 3).
Relative to private expenditure in health, which represents 50 percent of the health expenditure in Mexico, only 16 percent of it is destined to “other private” expenditure (Figure 4), which mainly includes private insurance.
The low public investment in health, as well as the economic difficulties to affiliate to a private insurance provider means that a significant part of the Mexican population has to incur out-of-pocket expenses (OOP), which directly impacts the economy of Mexican families (Figure 4). This significant out-of-pocket expense is not only identified in the OOP expenditure as a percentage of GDP but also in the contribution of the retail and private hospitals segments in the purchase of drugs (Figure 5).
This private segment has shown the highest growth rates, both at market level as in the high-specialty/high-cost segment.
COVID-19 Effect, Possible Solutions
The COVID-19 pandemic implied significant challenges to the healthcare system in various areas (Figure 6). This impact affected not only COVID-19 drugs but also therapies for high epidemiological impact diseases like chronic or degenerative conditions, that had no relation to the management of the pandemic but did represent a health reality for patients in Mexico.
In spite of drug availability challenges, 2020 represented the year with the highest drug purchasing growth in the last years, that had an important galvanization in the private channel (retail and hospitals), opening new growth opportunities for the diversification of pharmaceutical industry channels.
Even though the public sector still represents the most significant financing scheme for some therapeutic areas (e.g. immunology, vaccines, HIV, oncology) , we have observed in some catastrophic categories a noteworthy growth in out-of-pocket financing in the last year (e.g. rheumatology, immunology and oncology) .
This private growth sustainability, especially for high-cost therapies, will depend significantly on increasing private insurance affiliation and on new and innovative schemes (Figure 7) implemented by the health industry players (pharmaceutical industry, insurance companies, retailers, wholesalers, hospitals), that allow the continued support of patients who cannot be treated at public institutions for different reasons.
On the other hand, the public market with its various challenges including lack of financing, saturation, and operational bottlenecks, among others, will probably need to assure or implement various changes (Figure 8) if it plans to remain crucial in providing health services and therapies to most of the population in Mexico.
How Can the Industry Adapt?
In this evolving environment, according to Angeles Martinez, Senior Principal and Head of Consulting for North Latam at IQVIA, the different players in the healthcare system will need to evaluate their current operation, their alignment to a “new normal” and their preparedness for the coming years to optimize their strategies both in the public and private sectors. In Figure 9, we present some actions to be taken in the short term, with a focus on pharmaceutical companies looking to improve their strategic and operational approaches.
 IQVIA. GSDT Database. MAT February 2021
 IQVIA. PMM and NRC Database. MAT February 2021
 The Logistics World. “Desabasto de medicinas, consecuencia de lenta producción mundial fármacos y pandemia”. 2021
 WHO. Health Expenditure Database 2018
 AMIS. Public Information of Accidents and Diseases. 2019
 CONAPO. Mexican Population Database. 2019