Strong Product Mix Allows for Competitive Quality, PriceBy Miriam Bello | Tue, 12/15/2020 - 15:40
Q: How has Allen Laboratorios positioned itself as a key player in the Mexican healthcare market?
A: To provide the best quality generics, we follow the strict regulations Mexico applies to the pharmaceutical industry. Moreover, from 2018 to today, we have invested more than MX$200 million (US$9.9 million) to strengthen our production plant, which has allowed us to diversify our market from the public to the private sector. For the latter, we have looked for commercial partners among retailers, self-service stores and pharmacy chains to strengthen our presence and grow. In addition to expanding our market options, with this investment we went from manufacturing 3 million units per month to now having the capacity to produce 8 million units per month.
Q: In which areas are Allen Laboratorios’ strongest market niches?
A: Retail and self-service stores have become our strongest market niches through our proprietary brands. Pharmacy chains also represent a large share of our sales as we work with the largest companies in the country. Moreover, we are present at Farmacias Similares, which is a big reference in volume consumption. These three channels complement our supply to the government.
Q: How is Allen Laboratorios able to provide quality, accessible generics that respond to specialty treatments?
A: When growing our production plant, we took some risks regarding long-term negotiations for raw material supply to guarantee competitive prices and affordable costs. Moreover, we targeted the products that were having the most impact and best performance in the market regarding volume sales and focused solely on those. Allen Laboratorios also has successful supplements that received preferential prices due to their impact on the market. This mix of products has allowed us to offer excellence in quality and price.
Q: What new market niches have you identified in the past year?
A: We want to focus on regional or local chains to target consumers directly, instead of through larger distributors. Allen Laboratorios is also looking forward to dabbling into the Central American market. We offer basic products that would perform just as well there as they do in Mexico and we are already finding ways to enter that market. Moreover, regulations from Mexico are a reference for the region, meaning that we would not struggle on that subject at all. The products we are looking to strengthen are our analgesics, supplements and cough suppressants. One of our best-selling products is Gerial B, which is constantly undergoing a brand renewal process and continues to have the same success. In fact, we are working on making this product sugar-free as it is targeted for adults over 40 years of age. Recently, our Dexamethasone product has been selling successfully as it has been used to treat COVID-19 cases. These products have allowed us to expand our market reach and work strategically to keep positioning our products in the market.
Q: What has been the impact of changes in the public sector on the Mexican industry?
A: Government changes have brought uncertainty to the environment to the point of impacting the nation’s healthcare due to shortages. However, the intention is good and we are more than ready to keep doing things correctly. Allen Laboratorios decided to strengthen its internal processes to understand our capacity and profitability to supply the government in a timely manner and in full. We have been working with the government for four years and we have had a very smooth relationship, with a fair participation for our products while maintaining fair prices for both parties.
The environment changes constantly depending on the administration and in my opinion, we have to adapt and work together to continue delivering health treatments to patients. In our work with the government, we have a strong commitment to guarantee the delivery, quality, price and sufficiency of the products we provide. This disposition has slowly opened the door to dialogue between the industry and government.
The national industry strongly depends on the government tenders and the public sector depends on this supply, so it is important to restructure what has been done. Clarity and capacity are key in this process, as well as strategies to open to different markets, just as we have done, which will support companies in this transition. It is very important to highlight that Mexico has a very strong pharmaceutical industry that in addition to supplying therapies, provides dignified jobs and creates innovation opportunities leading to a virtuous circle for the local economy.
Q: How is Allen Laboratorios ensuring medicine distribution for pneumology and infectious diseases during the COVID-19 pandemic and influenza season?
A: After seeing the magnitude of COVID-19, we started to plan our raw material supply to complement our existent stock. Internally, we did not struggle. However, we did face the common disruptions of the logistics sector with border restrictions, limited sanitary inspections and a saturated COFEPRIS. Although the situation improved, we made local alliances for backup supply.
After solving this, we started to escalate our production, from 15 lots to 45, and started producing under our own brand, which saves marketing and packaging costs, as the urgency of the products deserved it. Prices for many of these urgent products have stabilized, which allows us to continue offering them at an affordable price without impacting the patient.
Q: How has the company successfully integrated technologies that boost your performance?
A: We shifted our focus from logistics to R&D. Without new developments, there is no way to grow, even if the capacity of the plant allows mass production. Actual growth comes from new solutions and better therapies that offer quality and are effective. To date, we have an R&D pipeline of more than 45 products that we hope to have ready by 2022.
Allen Laboratorios is a 100 percent Mexican manufacturer of pharmaceutical products with over 40 years of experience. The company has four business lines: Allen Laboratorios, SolaraF, AllEffective and Condones Vive