A Mid-Way Point for Distributors and End-UsersWed, 09/09/2015 - 11:58
Five years ago Medimarcas identified a market gap. In the climate at the time, it had become very complex for medical specialists to obtain medicines. Demand for points of sale, serving 24 hours a day, to facilitate access to medicines and medical disposables opened a door to the round-theclock medical supplier. Medimarcas originally planned to create a business model that gave suppliers a place to promote their products. Through auditoriums, they gave brands a place to carry out demonstrations so that doctors could learn about new devices, evaluate them, and decide whether to acquire them.
Carlos Razo García, the company’s Sales Director, explains that end users sometimes need a small order of a product that pharmaceutical distributors cannot supply profitably. “As a result, a situation arose in which distributors could set mandatory minimum quantities for clients in certain cases, while providing the quantity required in other cases.” Medimarcas does not possess exclusivity with any brand so is able to offer a broad range of products. Its strengths lie in medicines, basic medical products, and products for respiratory therapy, anesthesia, and diagnostics.
Having taken advantage of the immense demand for diabetes products among the Mexican population, other companies with many different specialties reached out to the company to commercialize products. Brands now included in the Medimarcas portfolio include B. Braun Melsungen AG, Terumo, Covedien India, Roche, and Johnson & Johnson. “When we think about incorporating new brands, we first seek out renowned brands as customers are already familiar with them,” explains Razo García. Now, the distributor sells both to wholesale and to retail in two different markets, one being a specialty market for medical professionals and another for the general public. It also supplies the government, distributors, and hospitals in Guadalajara. The retail points are open 24 hours and complemented by an online platform, and they have secured regular large and small customers, distributing all over Mexico. Regular buyers can obtain discount cards to increase customer loyalty. The company has even ventured into importations, working with SurtiMedik, which handles the importation process, while Medimarcas promotes, distributes, and sells the brands it imports. Razo is focused on attracting companies that already have the necessary documentation with COFEPRIS, as introducing a new product to the market involves a long and complex approval process.
The company employs two ways of reaching suppliers. It either directly contacts manufacturers to present them with a business model or attend expos abroad to invite foreign brands to Mexico. Foreign entities can be reluctant to deal with unfamiliar regulations and practices. Also the size of investment needed to incorporate a company into the local chain can be a barrier, as significant capital is needed to finance salesmen, offices, publicity, and permits. However, Medimarcas supports companies looking for representatives and facilitates the processes. Once a deal is confirmed, the distributor adopts the brands’ products for local promotion in hospitals, clinics, and points of sale, handles the regulatory process, and frees up the budget they would have invested in the whole process for publicity and branding. This helps foreign brands feel secure entering the market in Mexico. Medimarcas also guarantees that all unsold products can be returned.
Medimarcas employs doctors as product specialists working as part of the marketing team and these doctors visit hospitals to promote products. However, Medimarcas does not offer doctors at the point of sale. Razo sees that practice as being somewhat controversial as it does also raise a conflict of interest issue. While Medimarcas sells medication, their products are not oriented to this business model. The market is growing quickly in sales, particularly in the disposables segment. Using alcohol to clean wounds remains a common practice in Mexico and Razo believes the country must improve and update its medical procedures, especially in the public sector and an essential part of improving access to new medications and devices is to gain COFEPRIS approval. “The regulator can either be an ally to producers and distributors of medical disposables by denying access to low-quality counterfeit products, or it can be an obstacle by limiting access to quality brands due to lengthy and slow regulatory procedures.” Several companies, including Medimarcas, are gathering as part of National Association of Health Providers (ANAPS) to promote initiatives to the government and reduce the required timelines to approve a product. Some countries in Latin America allow foreign companies to sell their products if the FDA approves them. Such a move would be convenient for Mexico as well as it could improve the quantity of high-quality products available to Mexican patients.