Mexico's Strategic Growth in Pharma and Medical Nearshoring

Over the past seven years, Mexico’s health sector has faced significant challenges that cannot be ignored. The evidence is clear: maintaining a passive approach and continuing with business as usual despite these structural issues would be a mistake.

Recent government initiatives, including the launch of the “Plan México,” acknowledge the need to strengthen several areas of the national health system. While I am not a political expert, my professional experience within the healthcare supply chain allows me to observe first-hand how certain areas have deteriorated and why addressing them has become increasingly urgent.

A useful way to analyze the current situation is through a SWOT analysis, identifying the sector’s strengths, weaknesses, opportunities and threats. By doing so, Mexico can define clear priorities and implement strategies to reverse current challenges and reinforce the resilience of the health sector.

Nearshoring: Mexico as a Pharmaceutical Manufacturing Hub

One of the most strategic opportunities for Mexico is the expansion of nearshoring in pharmaceutical manufacturing.

The COVID-19 pandemic dramatically reshaped global supply chains and highlighted the need for countries to secure regional production capabilities for essential healthcare products. Mexico holds a unique strategic position in this context. Sharing more than 3,000km of border with the United States — the world’s largest consumer of pharmaceuticals and medical devices — provides a natural advantage.

Mexico has experienced sustained growth in the pharmaceutical sector and continues to position itself as an attractive destination for industrial investment. In 2025, the country reached record levels of foreign direct investment, particularly in advanced manufacturing. The challenge now is to ensure that a greater portion of this investment reaches the healthcare sector.

Beyond geographical proximity to the United States, Mexico offers additional advantages. Efficient logistics allow for shorter delivery times and reduced transportation costs. Equally important is the country’s strong talent base. Public and private universities across Mexico graduate professionals every year in pharmaceutical chemistry, biotechnology, biomedical engineering, and related disciplines, providing a highly qualified workforce for research centers, innovation hubs, and manufacturing facilities.

However, Mexico still relies heavily on imports of active pharmaceutical ingredients (APIs), mainly from India and China. Strengthening domestic production capacity in this area represents a major opportunity for the country.

Strengthening the Medical Device Industry

A second priority is the development of a stronger national supply chain for medical device manufacturing.

Mexico has already become one of the most important global producers of medical devices. This success is the result of long-term investment by both national and multinational companies that recognized Mexico’s potential as a manufacturing hub. Key industrial clusters have emerged along the northern border, including Tijuana, Chihuahua, Coahuila and Monterrey, as well as in the Bajío region.

Despite this progress, the sector faces uncertainty due to shifting global economic policies. To mitigate these risks, Mexico must continue developing national supplier networks that reduce external dependency and strengthen industrial resilience.

Key Structural Challenges

Several structural challenges still need to be addressed.

One of them is the lack of local API production infrastructure. Many of Mexico’s API manufacturing facilities disappeared in the 1990s, leaving the country dependent on imports. Additionally, there is still a shortage of innovation hubs dedicated to the development of new molecules and the execution of pre-clinical and clinical trials.

Encouragingly, there are initiatives aiming to reverse this situation. A recent agreement between Moderna and Laboratorios Liomont to develop mRNA vaccine manufacturing capacity in Mexico represents an important step toward rebuilding domestic capabilities.

Another critical issue is the regulatory environment. Response times for authorizations from COFEPRIS remain lengthy, which can discourage investment and delay innovation. Regulatory efficiency is essential to maintain competitiveness, particularly as other countries adopt faster approval frameworks such as reliance pathways.

Security challenges also impact supply chains. Logistics disruptions, theft, and customs delays can create significant operational risks for companies operating in the healthcare sector.

Preparing for the Future 

As the review of the United States–Mexico–Canada Agreement approaches, Mexico has an opportunity to reinforce its role within the North American healthcare manufacturing ecosystem.

Strengthening quality standards, traceability systems and supply chain resilience will be essential to reduce dependency risks and prevent shortages of critical medicines and medical devices. At the same time, production facilities must continue evolving to meet international regulatory standards and adapt to global market demands.

A Strategic Opportunity for Mexico

Mexico has the necessary elements to become an even stronger player in the global healthcare manufacturing landscape. The country possesses geographical advantages, industrial infrastructure, and highly qualified talent.

However, unlocking this potential will require coordinated efforts: reducing operational risks, strengthening regulatory efficiency and implementing clear public policies that support innovation and investment.

If these elements align, Mexico can consolidate its position as a key hub for pharmaceutical and medical device manufacturing in the region.

The opportunity is real — and achievable.