Q: How does INEFAM help its clients succeed in the Mexican and Latin American public sector?

JF: We are a business think tank that gets large amounts of information through transparency requests, submitting over a thousand requests per month to 300 Mexican public institutions. Those requests provide us with information about the use of public resources for the purchase, acquisition, administration, prescription and consumption of medicines and medical supplies and devices. We provide clients access to a business intelligence tool that allows them to observe the consumption, purchase or prescription of any product at any public institution.

Simultaneously, we provide pharmaceutical associations with hard data to protect the interests of the sector and the population. We work with guilds, chambers and associations from both the medical devices and the pharma sectors. Foreign companies are highly interested in the Mexican market and the public health sector as it provides services to over 128 million individuals. Our services have allowed us to be leaders in information services for almost 16 years. As providers of information services, we have no competition.

Q: Has the role of INEFAM transformed after the COVID-19 pandemic?

JF: Our sales reached an all-time high during the pandemic. Before the pandemic, we approached potential clients directly at their offices, catering only to about three clients per day. During the pandemic, we were able to work with about seven clients per day. After the pandemic, we increased our presence in Mexico and Brazil and doubled our productivity.

Q: The UN called Mexico’s project to acquire medicines from UNOPS one of the best acquisitions projects in the world in 2022. What is your view?

EM: Before Mexico’s purchase request, UNOPS had never dealt with a contract of a similar size. UNOPS records show that this transaction with Mexico exceeded any other process it had implemented before. UNOPS has worked with Guatemala, which has 7 million people, and Honduras, which has 4 million. The project with Mexico was challenging since the country has over 128 million habitants. The contract for medicines, medical devices and supplies was valued at over MX$45 billion (US$2.27 billion).

Looking at the numbers, we can conclude that UNOPS was a co-participant in the creation of one of the greatest years of shortages in the health system. It is unfortunate that the UN gave that recognition without acknowledging the results and while many Mexicans still have not received their treatments. The UN carried out the processes on its own time and did not adapt to the needs of the country, which was too big for them to handle since they do not have any experience on this scale.

UNOPs is also used to arriving in countries that lack legal scaffolding, professionals in public management and an established pharmaceutical industry. The Mexican Procurement Law has better-designed mechanisms than those that UNOPS tried to implement autonomously. We believe that the president was ill-advised in hiring this office.

JF: In addition, UNOPS executives blocked Mexican analysts and did not allow dialogue on social networks. This was a purchase for which UNOPS was not qualified, since over half of its projects are to provide training in female empowerment, equipping classrooms and hospitals, among other areas. UNOPS supports economies that do not have local sourcing. In the history of international trade, there had never been a drug purchase surpassing US$600 million.

UNOPS also violated national sovereignty by forcing Mexico to modify the first article of the Procurement Law. This shielded UNOPS completely and it does not have to answer to any authority because its members in Mexico have the rank of diplomats. This is an international money laundering issue.

Q: INSABI recently announced that it will no longer require UNOPS’ help. What results can be expected from this decision?

EM: The exit of UNOPS is a recognition from the federal government and INSABI that the strategy did not deliver the expected results. Last year was one of the slowest in terms of procurement. This sector in Mexico normally acquires between 1.6 and 1.8 billion products but last year, only 1.3 billion were obtained.

INSABI will continue to lead most purchasing processes and we are seriously concerned. The institute is behind in paying suppliers and there are many doubts surrounding the 2023-2024 purchase. The issue of logistics operators has yet to be resolved. At the beginning of this administration, some distributors were left out, moving the responsibility for logistics and distribution to the public sector. This left the country with only one-sixth of its former logistics capacity and increasing costs. Before this change, the price of a drug included last-mile distribution; now, the price is independent, so distribution costs are higher. There are also social costs that will put greater financial pressure on patients, who are also not receiving their treatments in a timely manner.

Q: What changes would you expect future administrations to implement to rectify the current scenario?

EM: It will take many years to reverse these consequences. This administration has two years left and it will not be enough time to fix what has been done. If this trend continues, the health system will become even more complex unless the government is willing to work with the private sector. Greater collaboration could generate models to better address this situation. The public sector must ensure services and demand through agreements with the private initiative to comply with the delivery of medicines and treatments.

JF: Some Mexicans think that social security is a privilege, when it really is a right. For the past three years, there have not been enough vaccines for children, not even in the private sector. Before that, Mexico’s vaccination protocols were some of the most successful worldwide but now, only 3 out of every 10 newborns have access to the necessary vaccines. As a result, life expectancy has been reduced by at least three years.

Q: What major successes has INEFAM experienced throughout 2022 and what are the company’s priorities for 2023?

JF: We have strengthened INEFAM's reputation as an authority in terms of data management, providing information that has been used to benefit the population. We also increased our participation with executive, corporate and international committees interested in Mexico. The country is an attractive market for transnational companies but many do not understand the particularities of the sector. In 2023, we will focus on market diversification and solidify our presence in the provision of foreign trade audits as we seek to continue focusing on internationalization.

EM: In 2022, we have become a reference. We do not provide unverified information. The last few years have been challenging but the industry prevailed despite payment arrears and logistics and distribution problems.

Many foreign companies aim to settle in Mexico, which is challenging due to its many regulations. We can collaborate with them to support them. By 2023, we seek to consolidate our work with the public sector but the year will be extremely challenging in terms of medicine supply. We must also focus on increasing awareness of the relevance of medical devices, since Mexico is a country that produces many but has one of the lowest rates of local consumption.

Instituto Farmacéutico México (INEFAM) is a privately held company that specializes in market research about the Mexican public sector and provides specialized training for government sales and access strategy consulting.