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Analysis

Toward a Business Scheme Centered on Tech and Patient Care

Wed, 09/05/2018 - 14:32

The Mexican medical devices industry has made great strides in recent years, climbing the export rankings to become a world leader, with more room to grow. Pharmacies, meanwhile, are emerging as a vanguard for primary care. Together these segments are redefining patient care

The medical devices industry is divided, according to CANIFARMA statutes, into two sections: health-related auxiliary products (PAPS) and diagnostic, reactive, selfmonitoring (RSD) and personal care products. The RSD industry represents companies whose technology facilitates the obtaining of biometric indicators of patients through medical tests and also represents authorized manufacturers and distributors of medical devices. The PAPS division groups manufacturers and distributors of disposable healing materials, dialysis bags, gloves, surgical garments and other materials required for surgery and the application of medicines.

Overall, it took a decade but Mexico is now a global leader in manufacturing and exporting medical devices, ranking eighth in the world and No. 1 in Latin America, according to ProMéxico. The country is also the leading provider of medical devices to the US; but insiders say the country cannot rest on its laurels, with significant room for continued growth in the coming years and a key issue that has yet to be resolved: access.

“Medical devices companies see significant potential in Mexico but are often stumped by their low penetration,” says Gérman García, Director General of Smith & Nephew Mexico. “The Mexican market for medical devices is growing at a less than 10 percent rate, in terms of use, which is much slower than expected. This phenomenon is caused by the lack of access to innovative products as it is extremely difficult to enter the basic lists of public institutions.”

Similarly, pharmacies are poised to play a greater role in healthcare delivery as digitalization, new business models and new regulations position these traditional retailers of medicines and supplies to provide a more integral service. In 2018, for instance, the Senate approved the reform of Article 79 of the General Health Law, which requires that those who work in a pharmacy possess titles or certificates of specialization that have been issued and legally registered by the competent educational authorities. But here, too, more needs to be done.

“Regulation regarding pharmacies has lagged far behind and regulators lack the necessary funds to properly address many issues. For instance, the sale of psychotropic medications is not applied correctly due to the lack of technology and the adequate processes to control it,” says Isaac Valdivieso, Director General of Farmacia San Pablo.

MEDICAL DEVICES

The medical devices market in Mexico has grown 15 percent annually in the last decade, according to Global Health Intelligence. ProMéxico reports that production totaled MX$13.8 billion in 2017, and estimated average annual growth of 3 percent for the period 2017-2022, which represents approximately MX$15.8 billion by 2022. Purchases of medical devices in 2017 amounted to MX$9.6 billion with a projected growth of 4 percent for the period 2017-2022, which would represent an approximate value of MX$11.7 billion for 2022.

CANIFARMA’s PAPS and RSD medical devices division has promoted regulation and market growth in recent years, but there are still sectors to be explored. For PAPS medical devices, the wound care market is underdeveloped and offers a great opportunity for companies to offer new and high-tech therapies that provide greater benefits to patients but also a cost-efficient solution for healthcare providers, says José Velasco, General Manager of Essity Medical Solutions Mexico.

MAIN RELATED INDUSTRY CHAMBERS AND ASSOCIATIONS

• Mexican Association of the Innovative Industry of Medical Devices (AMID)

• National Chamber of the Transformation Industry (CANACINTRA)

• National Chamber of the Pharmaceutical Industry (CANIFARMA)

• Mexican Association of Managers of Applied Research and Technological Development (ADIAT)

• Mexico-US Foundation for Science (FUMEC)

• Mexican Society of Biomedical Engineering (SOMIB)

• Cluster of Medical Products of the Californias

Source: ProMéxico

 

“Today, only 20 percent of the market is developed. The task of the industry is to increase market development in Mexico by 25-30 percent to improve technology and innovation in advanced therapy solutions,” says Velasco. The upcoming challenges for companies are to bolster the development of the medical devices sector and raise awareness about the benefits of investing in technology. The complementary priority would be to create a greater penetration of PAPS technologies in the public sector.

In addition to the continuous growth, 2018 also saw the appointment of Carlos Jiménez as the new president of AMID for the period 2018-2020. According to AMID, during this period the association will focus on maintaining high ethical standards, ensuring greater access to health innovation, addressing the illegal health market and contributing to make the process of purchasing medical devices more transparent and efficient for health professionals.

NEW SCHEME FOR PHARMACIES

Just as medical devices companies see opportunity on the horizon, pharmacies are also adopting more comprehensive healthcare schemes in which they are no longer just providers of medications and medical supplies, but include low-cost healthcare services to improve access for a large part of the population. According to the National Statistical Directory of Economic Units of INEGI, there are more than 150,000 ambulatory medical services in the country, of which 1,521 are pharmacies. This was one of the reasons why the Senate approved the modification of the General Health Law with the objective that pharmacies join the list of technical and auxiliary activities that require specific knowledge for the field of pre-hospital medical care.

The inclusion of digital tools and technology is also shaping the commercial scheme of pharmacies and redefining their ability to provide health assistance, while also offering avenues for growth. “Traditional pharmacies are limited in improving adherence because they only sell medicines and do not follow up with the patient while pharmaceutical companies, by law, cannot contact patients or customers,” says José Mora, CEO and Co-Founder of Farmalisto Mexico and Colombia. In this context, the emerging trend is for pharmacies to become an intermediary between the patient and the pharmaceutical industry. According to José Crespo, CEO of Farmalisto in Mexico, by incorporating technology pharmacies can improve communication with patients to increase adherence to treatment and at the same time safeguard sales. Therefore, e-commerce and other technologies can become the point of union between the needs of pharmacies and patients to improve the health environment. “Technologies like e-commerce can serve to provide value at all points along the value chain of medicine until the drugs reach the patient’s hands and even after that,” says Mora.

PHARMACY TRENDS FOR 2018

• Integration of start-up technology, supply-chain and e-commerce companies

• Shift from traditional brand-name drugs to specialty drugs

• Expansion of pharmacogenomics

• Use of Big Data to increase compliance and adherence

• Growth of self-care and healthcare consumerism

• Demand for new services to be available at pharmacies

• Increasing role for artificial intelligence in clinical experiences for the patient

• Demand for greater coordination with providers

• Pressure to reinvent traditional business models

Sources: McKesson and Wolters Kluwer

 

TECHNOLOGY SHAPING HEALTHCARE

There is little doubt that technology is extending its reach across services and products for the health sector. Pharmacies now have a greater depth of digital professionalization, including payment methods and the monitoring of the traceability of medicines. Medical device companies are being directly influenced by technology. “There is a clear digital trend in PAPS medical devices as marketing and digital media are creating synergies with e-commerce to deliver products more efficiently,” says José Velasco, General Manager of Essity Medical Solutions Mexico. However, some areas are more experienced than others in using technology, Velasco says: “Some companies already have e-commerce experience in the health industry but the medical devices segment is not as developed.”

Production of Medical Devices