A Unified Force for Industry Growth

Q: As Director General of CANIFARMA what is your overview of the pharmaceutical industry?

A: The pharmaceutical industry has greatly evolved in the last five years. In the past four years we designed a development program and introduced it to the transitioning government in 2012. We have also made a point of the potential the pharmaceutical industry has to become one of the pillars of the Mexican economy. In 2013 both the Minister of Health and the Vice-minister of Economy on the new government acknowledged the pharmaceutical industry as a strategic area for the health sector and a priority for the Mexican economy, which in turn created a number of opportunities to foster the growth of the pharmaceutical industry, and its involvement in development programs.

Q: What are the pillars for the advancement of CANIFARMA?

A: There are three pillars for advancement. The first is to focus on industrial development in order to increase the participation of the pharmaceutical sector in the chemical gross domestic product from 17 to 20%, for which we are working alongside the government. The second is to increase clinical research in Mexico. We are negotiating agreements towards this objective with IMSS and several National Institutes of Health, such as nutrition and oncology, as our country can become the most important center for clinical trials in Latin America with the support of these institutions. The main obstacle is the long time required to move forward the legislation for clinical trials. The third pillar is to improve the regulatory framework, for which we are working alongside COFEPRIS, who acquired recognition as a national reference regulatory agency from the Pan American Health Organization (PAHO) in 2012. This is a huge asset for the pharmaceutical industry since it opens new markets in Latin America.

Q: What is CANIFARMA’s role in the pharmaceutical industry?

A: CANIFARMA is unique in Latin America. Most countries have only two organizations representing each side: innovative and generics. Mexico is the only country to have an umbrella organization like CANIFARMA which brings them both together and can mediate between them. We have evidence that pharmaceutical companies chose to belong to CANIFARMA. Fifteen years ago every company that operated in Mexico had to subscribe to their umbrella organization so belonging to CANIFARMA was mandatory. The legislation has been modified and nowadays pharmaceutical companies can choose whether to stay or leave us. They chose to remain and we have about 200 members organized in sections such as medical devices, pharmaceutical companies, and veterinarian companies. Thus, we are neutral mediators between pharmaceutical companies. We take the same stance on the competition between generics and innovative medication and that between innovative biotechnologicals and biosimilars. In every case we promote a fair and neutral environment for the negotiations.

Q: What is your perspective on the cooperation between pharmaceutical companies and the public health sector?

A: Pharmaceutical companies are enthusiastic to cooperate with the public sector, especially to perform clinical trials. To foster this cooperation the most important factor would be to reduce the time required by the public sector to authorize clinical-trial protocols, which would in turn encourage companies to increase their involvement with the IMSS. There is progress in this regard as COFEPRIS has already improved their regulatory processes, but there are several obstacles, mainly the complicated procedures of approval of new drugs in the formularies of IMSS and ISSSTE, who represent the largest share of the sector. CANIFARMA’s main objective is to facilitate and optimize the time for the approval of clinical trials in Mexico.

Q: What measures should be taken in order to reduce the time required for new medicines to come to the market?

A: Standardizing these different procedures would be helpful and we hope that these institutes will work together to this end. On the other hand, the industry has to create new processes to introduce innovative medications to these institutions. A joint venture between both parties would be convenient so as to share the risk of introducing new medications, by sharing also the cost of treatment against its effectiveness; this is, if the drugs provided by the industry improve the result of the treatment, the cost would be paid by the public sector. If on the contrary, the  treatment is ineffective the pharmaceutical companies would cover the costs of the treatment.

Q: Some companies might believe that Mexico does not have the proper facilities for manufacturing medications. In your opinion what does Mexico need to become a manufacturing hub?

A: I think that Mexico is already a manufacturing hub. Some local companies may not be satisfied with the regulatory framework and the tax incentives, but many small foreign companies come to Mexico and grow in the Mexican market. Big pharma may have some problems to maintain their facilities in Mexico because their global policies must be adapted to Mexico. However, they recognize that our country has very strong advantages, such as the size of the population, a strong local market, and a privileged geographical situation. Besides, Mexico has a strong intellectual property framework, and the new PAHO recognition is also a warranty for the investment of international companies.

Q: Are imports and exports balanced within the country?

A: The current market is very unbalanced for Mexico. We have to import many active pharmaceutical ingredients and there are little exports to Latin America. The exports market is growing with the PAHO recognition but there is still a lot of work to be done. We believe that the market for active principles will be balanced in three or four years and our sector will not be dependent on imports from other countries.

Q: Are there any opportunities for innovation in Mexico? Who should fund them?

A: Mexico has several opportunities for innovation on clinical research. President Enrique Peña Nieto has proposed to increase the investment in R&D to 1% of the GDP by 2018 but this target is unlikely to be achieved. We believe that investments on R&D should come from pharmaceutical companies in joint ventures with the government. The pharmaceutical industry invests about 3.7% of their sales in R&D in Mexico, a very different figure than that from the government.

Q: Companies that are just beginning their operations in Mexico often claim that it is very difficult to acquire financial support. Should CANIFARMA become involved?

A: When companies are just starting they may find difficulties to acquire funding, but this is slowly changing. Our recent recognition as a priority sector for the Mexican economy is opening doors. Right now we receive support from several institutions such as Nacional Financiera and the National Institute for Entrepreneurs (INADEM). Also Bancomext and ProMéxico provide financial support for exports and CONACYT funds research. We have  established mechanisms to facilitate the access to these funds for smaller companies by promoting meetings and providing mediation between them and financial institutions. We started this process in June 2013 with support from the government and have now a number of success stories with national and international companies.

Q: Is pharmaceutical innovation too expensive for national pharmaceutical companies?

A: It may be expensive but there is funding and work with several institutions that carry out innovative research, through mechanisms such as the CANIFARMA R&D prize for universities, or the relationship of research institutes and scientists with different companies. The problem is that institutes and universities develop many interesting molecules that never reach the market. CANIFARMA is working to develop the linkage between research institutions and pharmaceutical industries. Another problem is the dependence of the public health sector on generic medications. IMSS and ISSSTE have the final say to determine the cost of medications. The advantage of generics is that they are safe and thus can be provided to a large number of patients at a more affordable cost. The public health sector, with its limited budget, is unwilling to fund innovation, even if it would be advantageous in the long term. This problem however, is not unique to Mexico, it is quite common of public health sectors all over the world.

Q: What is the public health sector’s main priority?

A: Right now, the public health sector is mainly interested in treating the main diseases that affect the Mexican population, such as diabetes and cardiovascular diseases. Since a large population of patients requires treatments for these diseases, there is not enough budget to treat other illnesses that affect smaller numbers of patients. Prevention programs to reduce this type of ailments are being implemented, but CANIFARMA is not involved in this process as this is a public health decision. These programs aim at reducing the cost of treatment by controlling the progress of the disease.

Q: There are predictions that in 2020 Mexico will become a manufacture center in Latin America. How close are we from that?

A: It’s a work in progress. We have to accelerate the growth of the pharmaceutical industry in order to achieve this goal. Our objectives are to increase governmental support for the development of innovative medicines, to improve negotiations with the companies that are affiliated to CANIFARMA, and to promote their growth. Our final objective is to increase the number of members in the chamber to 250, in the different sections.