Jorge Cueto
Lead Partner of the Healthcare Sector
Deloitte
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View from the Top

Steering Through Mexico's Healthcare Investment Environment

Wed, 09/07/2016 - 14:23

Q: What are your plans to consolidate and expand the healthcare and life sciences practice in Deloitte?

A: Healthcare and life sciences is one of the most relevant industries for Deloitte’s global operations. Today, it is the fastest growing industry for Deloitte in the US. We are expanding our services and capabilities in Mexico, covering multiple industrial segments, including pharmaceutical, bioscience, medical devices and healthcare systems. We provide our customers with valuable solutions for their local and regional R&D, manufacturing, commercial and operation processes. Collaborations with COFEPRIS and third-party authorized units are fundamental to devising effective strategies for product registrations. Go-to-market strategies also are relevant to our solution portfolio, advising companies on how to enter the country with a strong understanding of its economic, fiscal and labor issues. We are experts in the industry’s entire value chain with an important focus on innovation and technology

Q: While there are global trends shaping the industry, what would be the regional issues companies have to adapt to be successful?

A: Optimizing healthcare costs is one of the most important challenges globally and locally. There are many initiatives taking place in this regard. As such, we advise our customers on developing trends and proper ways to implement them. We see many healthcare systems interested in devising prevention strategies; nevertheless, effective implementation has not taken place. Instead of focusing on a fix and break model burdening the healthcare system, providers are shifting toward investing significant resources in prevention, selfcare and education. Getting these programs properly implemented remains one of the industry’s biggest challenges. These efforts will see technology platforms and industrial clusters playing an important role in the system’s development. The economic reality of each individual country is yet another regional challenge. In Mexico, 20 percent of the population retains 80 percent of the country’s wealth, which has resulted in a strong market penetration for generic drugs.

Q: How are healthcare providers changing their perspective on efficiency and how is Deloitte supporting them in this endeavor?

A: There are two different things happening in Mexico. Firstly, multiple M&A activities in both the pharmaceutical and provider spectrum are unfolding, which denotes the consolidation efforts Mexico’s healthcare system is undergoing. Secondly, many players in the healthcare arena are focusing on its efficiency. Public institutions are finally beginning to understand the importance of indicators, metrics and their performance in comparison to local and foreign hospital data.

Q: What do you think is necessary to improve technology adoption in public institutions?

A: Clinical outcomes not having a direct impact on the ROI is a great challenge for healthcare providers. When patients go to hospitals, providers get paid regardless of the clinical outcome. As such, there is still some industry resistance to invest in technology, considering the revenue of public institutions does not grow from positive clinical outcomes. We expect the tide will change over the next couple of years. Pay for performance is a way of risk sharing, where companies get paid only if expected outcomes are reached.

Q: How can pharmaceutical companies be supported in attracting direct foreign investment to the country?

A: I think that Mexico has a great opportunity to leverage what COFEPRIS achieved in recent years. Nowadays, many states are open to provide incentives to companies in this industry. Moreover, with the certifications and recognitions COFEPRIS has earned from WHO and PAHO, Mexico is now among the 44 countries with a fast track in place. For instance, by performing R&D and manufacturing activities in the country, companies will have access to other regional markets. Firstly, the costeffectiveness of manufacturing activities in Mexico is far greater than other countries in the region. Establishing plants in Mexico from the legal and fiscal standpoint is also much easier. Secondly, Mexico is close to the US, one of the biggest markets in the world.