José Luis Rojas
Vice President
Ulta Laboratorios
View from the Top

Private Market, Land of Opportunities

Wed, 09/05/2018 - 12:43

Q: Ultra Laboratorios has its own business line, manufactures products and works for the government. In which area is the company most focused?

A: Right now, our capacities are largely focused on supplying the public health system. But, the supply of great quality products at affordable prices to the private sector is growing stronger every day and it is becoming an important part of our business model.

The government’s health budget is not growing as fast as needed. For instance, while other OECD countries spend on average around 9 percent of their GDP on healthcare, Mexico only spends 6 percent. For that reason, the private sector is beginning to have a stronger presence. A good example of this is the introduction of doctors in pharmacies. These clinics usually work only with generics and COFEPRIS has made significant efforts to ensure that generics comply with all necessary regulations and that their quality is comparable to those of the best brands in the world.

Q: What are the main differences between working for the public and private sectors?

A: They are entirely different. First of all, the private sector manages many private labels, so the same product must be split and labeled depending on its final destination. This makes the supply chain extremely important for those clients who are more interested in supply than pricing.

As COFEPRIS' guidelines are becoming the state-of-the-art of regulations, it is a great moment for the laboratories in Mexico to set the path for all Latin American laboratories regarding production of generics.

Q: What would you identify as the main areas of opportunity in a market with so many international companies?

A: We have found many growth opportunities, mainly because of increasingly higher prices for patented products, which are widening the price gap between generics and patented medicines. It is also very difficult for international laboratories to obtain the number of registrations similar to those of a Mexican laboratory to enter the generics market.

Ultra Laboratorios is extremely interested in expanding its presence in the private sector but to achieve this, the company needs to expand its manufacturing capabilities to increase its production speed and capacity. According to IMS Health, today we are between the second and the fourth pharmaceutical company in terms of units sold and value.

In 2018, we will complete the construction of a new plant in Guadalajara, which represents an investment close to MX$1 billion. Once we increase our production capacity, we can expand to the US and other countries. There are also significant growth opportunities in Mexico since generics represent only 8 percent of a total private market valued at US$13 billion.

Q: How are you investing in technology and innovation?

A: We are making a strong investment in our new plant by acquiring Italian and German equipment. These pieces are more expensive than their Chinese counterparts but they have better quality and performance and provide more long-term benefits.

Today our focus is mainly on solids but in the coming years we are looking forward to having a stronger position in antibiotics, hormones and solids.

Q: How are you adapting your product portfolio to address the rise of chronic diseases?

A: According to Knobloch CID, in 2020, 60 percent of the expenditure in units will go to the treatment of chronic illnesses. With that in mind, we refocused our pipeline five years ago to focus on having a strong presence in that market to take advantage of the opportunities that may arise due to the expiration of patents and to comply with all regulatory guidelines.